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e-CFR Data is current as of October 1, 2007
Title 47: Telecommunication
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PART 32—UNIFORM SYSTEM OF ACCOUNTS FOR TELECOMMUNICATIONS COMPANIES
___________________________________
Section Contents
Subpart A—Preface
§ 32.1 Background.
§ 32.2 Basis of the accounts.
§ 32.3 Authority.
§ 32.4 Communications Act.
Subpart B—General Instructions
§ 32.11 Classification of companies.
§ 32.12 Records.
§ 32.13 Accounts—general.
§ 32.14 Regulated accounts.
§ 32.15 [Reserved]
§ 32.16 Changes in accounting standards.
§ 32.17 Interpretation of accounts.
§ 32.18 Waivers.
§ 32.19 Address for reports and correspondence.
§ 32.20 Numbering convention.
§ 32.21 Sequence of accounts.
§ 32.22 Comprehensive interperiod tax allocation.
§ 32.23 Nonregulated activities.
§ 32.24 Compensated absences.
§ 32.25 Unusual items and contingent liabilities.
§ 32.26 Materiality.
§ 32.27 Transactions with affiliates.
Subpart C—Instructions for Balance Sheet Accounts
§ 32.101 Structure of the balance sheet accounts.
§ 32.102 Nonregulated investments.
§ 32.103 Balance sheet accounts for other than regulated-fixed assets to
be maintained.
§ 32.1120 Cash and equivalents.
§ 32.1170 Receivables.
§ 32.1171 Allowance for doubtful accounts.
§ 32.1191 Accounts receivable allowance—other.
§ 32.1220 Inventories.
§ 32.1280 Prepayments.
§ 32.1350 Other current assets.
§ 32.1406 Nonregulated investments.
§ 32.1410 Other noncurrent assets.
§ 32.1438 Deferred maintenance and retirements.
§ 32.1500 Other jurisdictional assets—net.
§ 32.2000 Instructions for telecommunications plant accounts.
§ 32.2001 Telecommunications plant in service.
§ 32.2002 Property held for future telecommunications use.
§ 32.2003 Telecommunications plant under construction.
§ 32.2005 Telecommunications plant adjustment.
§ 32.2006 Nonoperating plant.
§ 32.2007 Goodwill.
§ 32.2110 Land and support assets.
§ 32.2111 Land.
§ 32.2112 Motor vehicles.
§ 32.2113 Aircraft.
§ 32.2114 Tools and other work equipment.
§ 32.2121 Buildings.
§ 32.2122 Furniture.
§ 32.2123 Office equipment.
§ 32.2124 General purpose computers.
§ 32.2210 Central office—switching.
§ 32.2211 Non-digital switching.
§ 32.2212 Digital electronic switching.
§ 32.2220 Operator systems.
§ 32.2230 Central office—transmission.
§ 32.2231 Radio systems.
§ 32.2232 Circuit equipment.
§ 32.2310 Information origination/termination.
§ 32.2311 Station apparatus.
§ 32.2321 Customer premises wiring.
§ 32.2341 Large private branch exchanges.
§ 32.2351 Public telephone terminal equipment.
§ 32.2362 Other terminal equipment.
§ 32.2410 Cable and wire facilities.
§ 32.2411 Poles.
§ 32.2421 Aerial cable.
§ 32.2422 Underground cable.
§ 32.2423 Buried cable.
§ 32.2424 Submarine & deep sea cable.
§ 32.2426 Intrabuilding network cable.
§ 32.2431 Aerial wire.
§ 32.2441 Conduit systems.
§ 32.2680 Amortizable tangible assets.
§ 32.2681 Capital leases.
§ 32.2682 Leasehold improvements.
§ 32.2690 Intangibles.
§ 32.3000 Instructions for balance sheet accounts—Depreciation and
amortization.
§ 32.3100 Accumulated depreciation.
§ 32.3200 Accumulated depreciation—held for future telecommunications use.
§ 32.3300 Accumulated depreciation—nonoperating.
§ 32.3400 Accumulated amortization—tangible.
§ 32.3410 Accumulated amortization—capitalized leases.
§ 32.3999 Instructions for balance sheet accounts—liabilities and
stockholders' equity.
§ 32.4000 Current accounts and notes payable.
§ 32.4040 Customers' deposits.
§ 32.4070 Income taxes—accrued.
§ 32.4080 Other taxes—accrued.
§ 32.4100 Net current deferred operating income taxes.
§ 32.4110 Net current deferred nonoperating income taxes.
§ 32.4130 Other current liabilities.
§ 32.4200 Long term debt and funded debt.
§ 32.4300 Other long-term liabilities and deferred credits.
§ 32.4320 Unamortized operating investment tax credits—net.
§ 32.4330 Unamortized nonoperating investment tax credits—net.
§ 32.4340 Net noncurrent deferred operating income taxes.
§ 32.4341 Net deferred tax liability adjustments.
§ 32.4350 Net noncurrent deferred nonoperating income taxes.
§ 32.4361 Deferred tax regulatory adjustments—net.
§ 32.4370 Other jurisdictional liabilities and deferred credits—net.
§ 32.4510 Capital stock.
§ 32.4520 Additional paid-in capital.
§ 32.4530 Treasury stock.
§ 32.4540 Other capital.
§ 32.4550 Retained earnings.
Subpart D—Instructions For Revenue Accounts
§ 32.4999 General.
§ 32.5000 Basic local service revenue.
§ 32.5001 Basic area revenue.
§ 32.5002 Optional extended area revenue.
§ 32.5003 Cellular mobile revenue.
§ 32.5040 Private line revenue.
§ 32.5060 Other basic area revenue.
§ 32.5081 End user revenue.
§ 32.5082 Switched access revenue.
§ 32.5083 Special access revenue.
§ 32.5100 Long distance message revenue.
§ 32.5200 Miscellaneous revenue.
§ 32.5230 Directory revenue.
§ 32.5280 Nonregulated operating revenue.
§ 32.5300 Uncollectible revenue.
Subpart E—Instructions for Expense Accounts
§ 32.5999 General.
§ 32.6110 Network support expenses.
§ 32.6112 Motor vehicle expense.
§ 32.6113 Aircraft expense.
§ 32.6114 Tools and other work equipment expense.
§ 32.6120 General support expenses.
§ 32.6121 Land and building expense.
§ 32.6122 Furniture and artworks expense.
§ 32.6123 Office equipment expense.
§ 32.6124 General purpose computers expense.
§ 32.6210 Central office switching expenses.
§ 32.6211 Non-digital switching expense.
§ 32.6212 Digital electronic switching expense.
§ 32.6220 Operator systems expense.
§ 32.6230 Central office transmission expense.
§ 32.6231 Radio systems expense.
§ 32.6232 Circuit equipment expense.
§ 32.6310 Information origination/termination expenses.
§ 32.6311 Station apparatus expense.
§ 32.6341 Large private branch exchange expense.
§ 32.6351 Public telephone terminal equipment expense.
§ 32.6362 Other terminal equipment expense.
§ 32.6410 Cable and wire facilities expenses.
§ 32.6411 Poles expense.
§ 32.6421 Aerial cable expense.
§ 32.6422 Underground cable expense.
§ 32.6423 Buried cable expense.
§ 32.6424 Submarine and deep sea cable expense.
§ 32.6426 Intrabuilding network cable expense.
§ 32.6431 Aerial wire expense.
§ 32.6441 Conduit systems expense.
§ 32.6510 Other property, plant and equipment expenses.
§ 32.6511 Property held for future telecommunications use expense.
§ 32.6512 Provisioning expense.
§ 32.6530 Network operations expense.
§ 32.6531 Power expense.
§ 32.6532 Network administration expense.
§ 32.6533 Testing expense.
§ 32.6534 Plant operations administration expense.
§ 32.6535 Engineering expense.
§ 32.6540 Access expense.
§ 32.6560 Depreciation and amortization expenses.
§ 32.6561 Depreciation expense—telecommunications plant in service.
§ 32.6562 Depreciation expense—property held for future telecommunications
use.
§ 32.6563 Amortization expense—tangible.
§ 32.6564 Amortization expense—intangible.
§ 32.6565 Amortization expense—other.
§ 32.6610 Marketing.
§ 32.6611 Product management and sales.
§ 32.6613 Product advertising.
§ 32.6620 Services.
§ 32.6621 Call completion services.
§ 32.6622 Number services.
§ 32.6623 Customer services.
§ 32.6720 General and administrative.
§ 32.6790 Provision for uncollectible notes receivable.
Subpart F—Instructions For Other Income Accounts
§ 32.6999 General.
§ 32.7100 Other operating income and expenses.
§ 32.7199 Content of accounts.
§ 32.7200 Operating taxes.
§ 32.7210 Operating investment tax credits—net.
§ 32.7220 Operating Federal income taxes.
§ 32.7230 Operating state and local income taxes.
§ 32.7240 Operating other taxes.
§ 32.7250 Provision for deferred operating income taxes—net.
§ 32.7300 Nonoperating income and expense.
§ 32.7400 Nonoperating taxes.
§ 32.7500 Interest and related items.
§ 32.7600 Extraordinary items.
§ 32.7899 Content of accounts.
§ 32.7910 Income effect of jurisdictional ratemaking differences—net.
§ 32.7990 Nonregulated net income.
Subpart G—Glossary
§ 32.9000 Glossary of terms.
___________________________________
Authority: 47 U.S.C. 154(i), 154(j) and 220 as amended, unless otherwise
noted.
Source: 51 FR 43499 , Dec. 2, 1986, unless otherwise noted.
Subpart A—Preface
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§ 32.1 Background.
top
The revised Uniform System of Accounts (USOA) is a historical financial
accounting system which reports the results of operational and financial
events in a manner which enables both management and regulators to assess
these results within a specified accounting period. The USOA also provides
the financial community and others with financial performance results. In
order for an accounting system to fulfill these purposes, it must exhibit
consistency and stability in financial reporting (including the results
published for regulatory purposes). Accordingly, the USOA has been designed
to reflect stable, recurring financial data based to the extent regulatory
considerations permit upon the consistency of the well established body of
accounting theories and principles commonly referred to as generally
accepted accounting principles.
§ 32.2 Basis of the accounts.
top
(a) The financial accounts of a company are used to record, in monetary
terms, the basic transactions which occur. Certain natural groupings of
these transactions are called (in different contexts) transaction cycles,
business processes, functions or activities. The concept, however, is the
same in each case; i.e., the natural groupings represent what happens within
the company on a consistent and continuing basis. This repetitive nature of
the natural groupings, over long periods of time, lends an element of
stability to the financial account structure.
(b) Within the telecommunications industry companies, certain recurring
functions (natural groupings) do take place in the course of providing
products and services to customers. These accounts reflect, to the extent
feasible, those functions. For example, the primary bases of the accounts
containing the investment in telecommunications plant are the functions
performed by the assets. In addition, because of the anticipated effects of
future innovations, the telecommunications plant accounts are intended to
permit technological distinctions. Similarly, the primary bases of plant
operations, customer operations and corporate operations expense accounts
are the functions performed by individuals. The revenue accounts, on the
other hand, reflect a market perspective of natural groupings based
primarily upon the products and services purchased by customers.
(c) In the course of developing the bases for this account structure,
several other alternatives were explored. It was, for example, determined
that, because of the variety and continual changing of various cost
allocation mechanisms, the financial accounts of a company should not
reflect an a priori allocation of revenues, investments or expenses to
products or services, jurisdictions or organizational structures. (Note also
§32.14 (c) and (d) of subpart B.) It was also determined that costs (in the
case of assets) should not be recorded based solely upon physical attributes
such as location, description or size.
(d) Care has been taken in this account structure to avoid confusing a
function with an organizational responsibility, particularly as it relates
to the expense accounts. Whereas in the past, specific organizations may
have performed specific functions, the future environment with its
increasing mechanization and other changes will result in entirely new or
restructured organizations. Thus, any relationships drawn between
organizations and accounts would become increasingly meaningless with the
passage of time.
(e) These accounts, then, are intended to reflect a functional and
technological view of the telecommunications industry. This view will
provide a stable and consistent foundation for the recording of financial
data.
(f) The financial data contained in the accounts, together with the detailed
information contained in the underlying financial and other subsidiary
records required by this Commission, will provide the information necessary
to support separations, cost of service and management reporting
requirements. The basic account structure has been designed to remain stable
as reporting requirements change.
§ 32.3 Authority.
top
This Uniform System of Accounts has been prepared under the following
authority: Section 4 of the Communications Act of 1934, as amended, 47
U.S.C. section 154 (1984); sections 219, 220 of the Communications Act of
1934, as amended, 47 U.S.C. sections 219, 220, (1984).
§ 32.4 Communications Act.
top
Attention is directed to the following extract from section 220 of the
Communications Act of 1934, 47 U.S.C. 220 (1984):
(e) Any person who shall willfully make any false entry in the accounts of
any book of accounts or in any record or memoranda kept by any such carrier,
or who shall willfully destroy, mutilate, alter, or by any other means or
device falsify any such account, record, or memoranda, or who shall
willfully neglect or fail to make full, true, and correct entries in such
accounts, records, or memoranda of all facts and transactions appertaining
to the business of the carrier, shall be deemed guilty of a misdemeanor, and
shall be subject, upon conviction, to a fine of not less than $1,000 nor
more than $5,000 or imprisonment for a term of not less than one year nor
more than three years, or both such fine and imprisonment: Provided, that
the Commission may in its discretion issue orders specifying such operating,
accounting or financial papers, records, books, blanks, or documents which
may, after a reasonable time, be destroyed, and prescribing the length of
time such books, papers, or documents shall be preserved.
For regulations governing the periods for which records are to be retained,
see part 42, Preservation of Records of Communications Common Carriers, of
this chapter which relates to preservation of records.
Subpart B—General Instructions
top
§ 32.11 Classification of companies.
top
(a) For purposes of this section, the term “company” or “companies” means
incumbent local exchange carrier(s) as defined in section 251(h) of the
Communications Act, and any other carriers that the Commission designates by
Order. Incumbent local exchange carriers' successor or assign companies, as
defined in section 251(h)(1)(B)(ii) of the Communications Act, that are
found to be non-dominant by the Commission, will not be subject to this
Uniform System of Accounts.
(b) For accounting purposes, companies are divided into classes as follows:
(1) Class A. Companies having annual revenues from regulated
telecommunications operations that are equal to or above the indexed revenue
threshold.
(2) Class B. Companies having annual revenues from regulated
telecommunications operations that are less than the indexed revenue
threshold.
(c) Class A companies, except mid-sized incumbent local exchange carriers,
as defined by §32.9000, shall keep all the accounts of this system of
accounts which are applicable to their affairs and are designated as Class A
accounts. Class A companies, which include mid-sized incumbent local
exchange carriers, shall keep Basic Property Records in compliance with the
requirements of §§32.2000(e) and (f).
(d) Class B companies and mid-sized incumbent local exchange carriers, as
defined by §32.9000, shall keep all accounts of this system of accounts
which are applicable to their affairs and are designated as Class B
accounts. Mid-sized incumbent local exchange carriers shall also maintain
subsidiary record categories necessary to provide the pole attachment data
currently provided in the Class A accounts. Class B companies shall keep
Continuing Property Records in compliance with the requirements of
§§32.2000(e)(7)(i)(A) and 32.2000(f).
(e) Class B companies and mid-sized incumbent local exchange carriers, as
defined by §32.9000 of this part, that desire more detailed accounting may
adopt the accounts prescribed for Class A companies upon the submission of a
written notification to the Commission.
(f) The classification of a company shall be determined at the start of the
calendar year following the first time its annual operating revenue from
regulated telecommunications operations equals, exceeds, or falls below the
indexed revenue threshold.
[ 67 FR 5679 , Feb. 6, 2002, as amended at 69 FR 53648 , Sept. 2, 2004]
§ 32.12 Records.
top
(a) The company's financial records shall be kept in accordance with
generally accepted accounting principles to the extent permitted by this
system of accounts.
(b) The company's financial records shall be kept with sufficient
particularity to show fully the facts pertaining to all entries in these
accounts. The detail records shall be filed in such manner as to be readily
accessible for examination by representatives of this Commission.
(c) The Commission shall require a company to maintain financial and other
subsidiary records in such a manner that specific information, of a type not
warranting disclosure as an account or subaccount, will be readily
available. When this occurs, or where the full information is not otherwise
recorded in the general books, the subsidiary records shall be maintained in
sufficient detail to facilitate the reporting of the required specific
information. The subsidiary records, in which the full details are shown,
shall be sufficiently referenced to permit ready identification and
examination by representatives of this Commission.
§ 32.13 Accounts—general.
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(a) As a general rule, all accounts kept by reporting companies shall
conform in numbers and titles to those prescribed herein. However, reporting
companies may use different numbers for internal purposes when separate
accounts (or subaccounts) maintained are consistent with the title and
content of accounts and subaccounts prescribed in this system.
(1) A company may subdivide any of the accounts prescribed. The titles of
all such subaccounts shall refer by number or title to the controlling
account.
(2) A company may establish temporary or experimental accounts without prior
notice to the Commission.
(b) Exercise of the preceding options shall be allowed only if the integrity
of the prescribed accounts is not impaired.
(c) As of the date a company becomes subject to the system of accounts, the
company is authorized to make any such subdivisions, reclassifications or
consolidations of existing balances as are necessary to meet the
requirements of this system of accounts.
(d) Nothing contained in this part shall prohibit or excuse any company,
receiver, or operating trustee of any carrier from subdividing the accounts
hereby prescribed for the purpose of:
(1) Complying with the requirements of the state commission(s) having
jurisdiction; or
(2) Securing the information required in the prescribed reports to such
commission(s).
(e) Where the use of subsidiary records is considered necessary in order to
secure the information required in reports to any state commission, the
company shall incorporate the following controls into their accounting
system with respect to such subsidiary records:
(1) Subsidiary records shall be reconciled to the company's general ledger
or books of original entry, as appropriate.
(2) The company shall adequately document the accounting procedures related
to subsidiary records.
(3) The subsidiary records shall be maintained at an adequate level of
detail to satisfy state regulators.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 65 FR 16334 , Mar. 28, 2000; 67 FR 5679 , Feb. 6, 2002]
§ 32.14 Regulated accounts.
top
(a) In the context of this part, the regulated accounts shall be interpreted
to include the investments, revenues and expenses associated with those
telecommunications products and services to which the tariff filing
requirements contained in Title II of the Communications Act of 1934, as
amended, are applied, except as may be otherwise provided by the Commission.
Regulated telecommunications products and services are thereby fully subject
to the accounting requirements as specified in Title II of the
Communications Act of 1934, as amended, and as detailed in subparts A
through F of this part of the Commission's Rules and Regulations.
(b) In addition to those amounts considered to be regulated by the
provisions of paragraph (a) of this section, those telecommunications
products and services to which the tariff filing requirements of the several
state jurisdictions are applied shall be accounted for as regulated, except
where such treatment is proscribed or otherwise excluded from the
requirements pertaining to regulated telecommunications products and
services by this Commission.
(c) In the application of detailed accounting requirements contained in this
part, when a regulated activity involves the common or joint use of assets
and resources in the provision of regulated and nonregulated products and
services, companies shall account for these activities within the accounts
prescribed in this system for telephone company operations. Assets and
expenses shall be subdivided in subsidiary records among amounts solely
assignable to nonregulated activities, amounts solely assignable to
regulated activities, and amounts related to assets used and expenses
incurred jointly or in common, which will be allocated between regulated and
nonregulated activities. Companies shall submit reports identifying
regulated and nonregulated amounts in the manner and at the times prescribed
by this Commission. Nonregulated revenue items not qualifying for incidental
treatment, as provided in §32.4999(l), shall be recorded in Account 5280,
Nonregulated operating revenue.
(d) Other income items which are incidental to the provision of regulated
products and services shall be accounted for as regulated activities.
(e) All costs and revenues related to the offering of regulated products and
services which result from arrangements for joint participation or
apportionment between two or more telephone companies (e.g., joint operating
agreements, settlement agreements, cost-pooling agreements) shall be
recorded within the detailed accounts. Under joint operating agreements, the
creditor will initially charge the entire expenses to the appropriate
primary accounts. The proportion of such expenses borne by the debtor shall
be credited by the creditor and charged by the debtor to the account
initially charged. Any allowances for return on property used will be
accounted for as provided in Account 5200, Miscellaneous revenue.
(f) All items of nonregulated revenue, investment and expense that are not
properly includible in the detailed, regulated accounts prescribed in
subparts A through F of this part, as determined by paragraphs (a) through
(e) of this section shall be accounted for and included in reports to this
Commission as specified in §32.23 of this subpart.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 6560 , Mar. 4, 1987; 53 FR 49321 , Dec. 7, 1988; 67 FR 5679 , Feb. 6, 2002]
§ 32.15 [Reserved]
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§ 32.16 Changes in accounting standards.
top
(a) The company's records and accounts shall be adjusted to apply new
accounting standards prescribed by the Financial Accounting Standards Board
or successor authoritative accounting standard-setting groups, in a manner
consistent with generally accepted accounting principles. The change in an
accounting standard will automatically take effect 90 days after the company
informs this Commission of its intention to follow the new standard, unless
the Commission notifies the company to the contrary. Any change adopted
shall be disclosed in annual reports required by §43.21(f) of this chapter
in the year of adoption.
(b) The changes in accounting standards which this Commission approves will
not necessarily be binding on the ratemaking practices of the various state
commissions.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 64 FR 50007 , Sept. 15, 1999; 67 FR 5679 , Feb. 6, 2002]
§ 32.17 Interpretation of accounts.
top
To the end that uniform accounting shall be maintained within the prescribed
system, questions involving significant matters which are not clearly
provided for shall be submitted to the Chief, Wireline Competition Bureau,
for explanation, interpretation, or resolution. Questions and answers
thereto with respect to this system of accounts will be maintained by the
Wireline Competition Bureau.
[ 67 FR 13225 , Mar. 21, 2002]
§ 32.18 Waivers.
top
A waiver from any provision of this system of accounts shall be made by the
Federal Communications Commission upon its own initiative or upon the
submission of written request therefor from any telecommunications company,
or group of telecommunications companies, provided that such a waiver is in
the public interest and each request for waiver expressly demonstrates that:
existing peculiarities or unusual circumstances warrant a departure from a
prescribed procedure or technique; a specifically defined alternative
procedure or technique will result in a substantially equivalent or more
accurate portrayal of operating results or financial condition, consistent
with the principles embodied in the provisions of this system of accounts;
and the application of such alternative procedure will maintain or improve
uniformity in substantive results as among telecommunications companies.
§ 32.19 Address for reports and correspondence.
top
Reports, statements, and correspondence submitted to the Federal
Communications Commission in accordance with or relating to instructions and
requirements contained herein shall be addressed to the Wireless Competition
Bureau, Federal Communications Commission, Washington, DC 20554.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 13225 , Mar. 21, 2002]
§ 32.20 Numbering convention.
top
(a) The number “32” (appearing to the left of the first decimal point)
indicates the part number.
(b) The numbers immediately following to the right of the decimal point
indicate, respectively, the section or account. All Part 32 Account numbers
contain 4 digits to-the-right-of the decimal point.
(c) Cross references to accounts are made by citing the account numbers to
the right of the decimal point; e.g., Account 2232 rather than the
corresponding complete part 32 reference number 32.2232.
§ 32.21 Sequence of accounts.
top
The order in which the accounts are presented in this system of accounts is
not to be considered as necessarily indicative of the order in which they
will be scheduled at all times in reports to this Commission.
§ 32.22 Comprehensive interperiod tax allocation.
top
(a) Companies shall apply interperiod tax allocation (tax normalization) to
all book/tax temporary differences which would be considered material for
published financial report purposes. Furthermore, companies shall also apply
interperiod tax allocation if any item or group of similar items when
aggregated would yield debit or credit entries which exceed or would exceed
5 percent of the gross deferred income tax expense debits or credits during
any calendar year over the life of the temporary difference. The tax effects
of book/tax temporary differences shall be normalized and the deferrals
shall be included in the following accounts:
4100, Net Current Deferred Operating Income Taxes;
4110, Net Current Deferred Nonoperating Income Taxes;
4340, Net Noncurrent Deferred Operating Income Taxes;
4350, Net Noncurrent Deferred Nonoperating Income Taxes.
In lieu of the accounting prescribed herein, any company shall treat the
increase or reduction in current income taxes payable resulting from the use
of flow through accounting in prior years as an increase or reduction in
current tax expense.
(b) Supporting documentation shall be maintained so as to separately
identify the amount of deferred taxes which arise from the use of an
accelerated method of depreciation.
(c) Subsidiary records shall be used to reduce the deferred tax assets
contained in the accounts specified in paragraph (a) of this section when it
is likely that some portion or all of the deferred tax asset will not be
realized. The amount recorded in the subsidiary record should be sufficient
to reduce the deferred tax asset to the amount that is likely to be
realized.
(d) The records supporting the activity in the deferred income tax accounts
shall be maintained in sufficient detail to identify the nature of the
specific temporary differences giving rise to both the debits and credits to
the individual accounts.
(e) Any company that uses accelerated depreciation (or recognizes taxable
income or losses upon the retirement of property) for income tax purposes
shall normalize the tax differentials occasioned thereby as indicated in
paragraphs (e)(1) and (e)(2) of this section.
(1) With respect to the retirement of property the book/tax difference
between (i) the recognition of proceeds as income and the accrual for
salvage value and (ii) the book and tax capital recovery, shall be
normalized.
(2) Records shall be maintained so as to show the deferred tax amounts by
vintage year separately for each class or subclass of eligible depreciable
telephone plant for which an accelerated method of depreciation has been
used for income tax purposes. When property is transferred to nonregulated
activities, the associated deferred income taxes and unamortized investment
tax credits shall also be identified and transferred to the appropriate
nonregulated accounts.
(f) The tax differentials to be normalized as specified in this section
shall also encompass the additional effect of state and local income tax
changes on Federal income taxes produced by the provision for deferred state
and local income taxes for book/tax temporary differences related to such
income taxes.
(g) Companies that receive the tax benefits from the filing of a
consolidated income tax return by the parent company, (pursuant to closing
agreements with the Internal Revenue Service, effective January 1, 1966)
representing the deferred income taxes from the elimination of intercompany
profits for income tax purposes on sales of regulated equipment, may credit
such deferred taxes directly to the plant account which contains such
intercompany profit rather than crediting such deferred taxes to the
applicable accounts in paragraph (a) of this section. If the deferred income
taxes are recorded as a reduction of the appropriate plant accounts, such
reduction shall be treated as reducing the original cost of the plant and
accounted for as such.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9418 , Feb. 28, 1994]
§ 32.23 Nonregulated activities.
top
(a) This section describes the accounting treatment of activities classified
for accounting purposes as “nonregulated.” Preemptively deregulated
activities and activities (other than incidental activities) never subject
to regulation will be classified for accounting purposes as
“nonregulated.” Activities that qualify for incidental treatment under the
policies of this Commission will be classified for accounting purposes as
regulated activities. Activities that have been deregulated by a state will
be classified for accounting purposes as regulated activities. Activities
that have been deregulated at the interstate level, but not preemptively
deregulated, will be classified for accounting purposes as regulated
activities until such time as this Commission decides otherwise. The
treatment of nonregulated activities shall differ depending on the extent of
the common or joint use of assets and resources in the provision of both
regulated and nonregulated products and services.
(b) When a nonregulated activity does not involve the joint or common use of
assets and resources in the provision of both regulated and nonregulated
products and services, carriers shall account for these activities on a
separate set of books consistent with instructions set forth in §§32.1406
and 32.7990. Transfers of assets, and sales of products and services between
the regulated activity and a nonregulated activity for which a separate set
of books is maintained, shall be accounted for in accordance with the rules
presented in §32.27, Transactions with Affiliates. In the separate set of
books, carriers may establish whatever detail they deem appropriate beyond
what is necessary to provide this Commission with the information required
in §§32.1406 and 32.7990.
(c) When a nonregulated activity does involve the joint or common use of
assets and resources in the provision of regulated and nonregulated products
and services, carriers shall account for these activities within accounts
prescribed in this system for telephone company operations. Assets and
expenses shall be subdivided in subsidiary records among amounts solely
assignable to nonregulated activities, amounts solely assignable to
regulated activities, and amounts related to assets and expenses incurred
jointly or in common, which will be allocated between regulated and
nonregulated activities. Carriers shall submit reports identifying regulated
and nonregulated amounts in the manner and at the times prescribed by this
Commission. Nonregulated revenue items not qualifying for incidental
treatment as provided in §32.4999(l) of this part, shall be recorded in
separate subsidiary record categories of Account 5280, Nonregulated
operating revenue. Amounts assigned or allocated to regulated products or
services shall be subject to part 36 of this chapter.
[ 52 FR 6560 , Mar. 4, 1987, as amended at 53 FR 49322 , Dec. 7, 1988; 59 FR 46930 , Sept. 13, 1994; 64 FR 50007 , Sept. 15, 1999]
§ 32.24 Compensated absences.
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(a) Companies shall record a liability and charge the appropriate expense
accounts for compensated absences (vacations, sick leave, etc.) in the year
in which these benefits are earned by employees.
(b) With respect to the liability that exists for compensated absences which
is not yet recorded on the books as of the effective date of this part, the
liability shall be recorded in Account 4130. Other current liabilities, with
a corresponding entry to Account 1438, Deferred maintenance, retirements and
other deferred charges. This deferred charge shall be amortized on a
straight-line basis over a period of ten years.
(c) Records shall be maintained so as to show that no more than ten percent
of the deferred charge is being amortized each year.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5679 , Feb. 6, 2002]
§ 32.25 Unusual items and contingent liabilities.
top
Extraordinary items, prior period adjustments, and contingent liabilities
may be recorded in the company's books of account without prior Commission
approval.
[ 65 FR 16334 , Mar. 28, 2000]
§ 32.26 Materiality.
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Companies shall follow this system of accounts in recording all financial
and statistical data irrespective of an individual item's materiality under
GAAP, unless a waiver has been granted under the provisions of §32.18 of
this subpart to do otherwise.
§ 32.27 Transactions with affiliates.
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(a) Unless otherwise approved by the Chief, Wireline Competition Bureau,
transactions with affiliates involving asset transfers into or out of the
regulated accounts shall be recorded by the carrier in its regulated
accounts as provided in paragraphs (b) through (f) of this section.
(b) Assets sold or transferred between a carrier and its affiliate pursuant
to a tariff, including a tariff filed with a state commission, shall be
recorded in the appropriate revenue accounts at the tariffed rate.
Non-tariffed assets sold or transferred between a carrier and its affiliate
that qualify for prevailing price valuation, as defined in paragraph (d) of
this section, shall be recorded at the prevailing price. For all other
assets sold by or transferred from a carrier to its affiliate, the assets
shall be recorded at no less than the higher of fair market value and net
book cost. For all other assets sold by or transferred to a carrier from its
affiliate, the assets shall be recorded at no more than the lower of fair
market value and net book cost.
(1) Floor. When assets are sold by or transferred from a carrier to an
affiliate, the higher of fair market value and net book cost establishes a
floor, below which the transaction cannot be recorded. Carriers may record
the transaction at an amount equal to or greater than the floor, so long as
that action complies with the Communications Act of 1934, as amended,
Commission rules and orders, and is not otherwise anti-competitive.
(2) Ceiling. When assets are purchased from or transferred from an affiliate
to a carrier, the lower of fair market value and net book cost establishes a
ceiling, above which the transaction cannot be recorded. Carriers may record
the transaction at an amount equal to or less than the ceiling, so long as
that action complies with the Communications Act of 1934, as amended,
Commission rules and orders, and is not otherwise anti-competitive.
(3) Threshold. For purposes of this section carriers are required to make a
good faith determination of fair market value for an asset when the total
aggregate annual value of the asset(s) reaches or exceeds $500,000, per
affiliate. When a carrier reaches or exceeds the $500,000 threshold for a
particular asset for the first time, the carrier must perform the market
valuation and value the transaction on a going-forward basis in accordance
with the affiliate transactions rules on a going-forward basis. When the
total aggregate annual value of the asset(s) does not reach or exceed
$500,000, the asset(s) shall be recorded at net book cost.
(c) Services provided between a carrier and its affiliate pursuant to a
tariff, including a tariff filed with a state commission, shall be recorded
in the appropriate revenue accounts at the tariffed rate. Non-tariffed
services provided between a carrier and its affiliate pursuant to
publicly-filed agreements submitted to a state commission pursuant to
section 252(e) of the Communications Act of 1934 or statements of generally
available terms pursuant to section 252(f) shall be recorded using the
charges appearing in such publicly-filed agreements or statements.
Non-tariffed services provided between a carrier and its affiliate that
qualify for prevailing price valuation, as defined in paragraph (d) of this
section, shall be recorded at the prevailing price. For all other services
sold by or transferred from a carrier to its affiliate, the services shall
be recorded at no less than the higher of fair market value and fully
distributed cost. For all other services sold by or transferred to a carrier
from its affiliate, the services shall be recorded at no more than the lower
of fair market value and fully distributed cost.
(1) Floor. When services are sold by or transferred from a carrier to an
affiliate, the higher of fair market value and fully distributed cost
establishes a floor, below which the transaction cannot be recorded.
Carriers may record the transaction at an amount equal to or greater than
the floor, so long as that action complies with the Communications Act of
1934, as amended, Commission rules and orders, and is not otherwise
anti-competitive.
(2) Ceiling. When services are purchased from or transferred from an
affiliate to a carrier, the lower of fair market value and fully distributed
cost establishes a ceiling, above which the transaction cannot be recorded.
Carriers may record the transaction at an amount equal to or less than the
ceiling, so long as that action complies with the Communications Act of
1934, as amended, Commission rules and orders, and is not otherwise
anti-competitive.
(3) Threshold. For purposes of this section, carriers are required to make a
good faith determination of fair market value for a service when the total
aggregate annual value of that service reaches or exceeds $500,000, per
affiliate. When a carrier reaches or exceeds the $500,000 threshold for a
particular service for the first time, the carrier must perform the market
valuation and value the transaction in accordance with the affiliate
transactions rules on a going-forward basis. All services received by a
carrier from its affiliate(s) that exist solely to provide services to
members of the carrier's corporate family shall be recorded at fully
distributed cost.
(d) In order to qualify for prevailing price valuation in paragraphs (b) and
(c) of this section, sales of a particular asset or service to third parties
must encompass greater than 25 percent of the total quantity of such product
or service sold by an entity. Carriers shall apply this 25 percent threshold
on an asset-by-asset and service-by-service basis, rather than on a
product-line or service-line basis. In the case of transactions for assets
and services subject to section 272, a BOC may record such transactions at
prevailing price regardless of whether the 25 percent threshold has been
satisfied.
(e) Income taxes shall be allocated among the regulated activities of the
carrier, its nonregulated divisions, and members of an affiliated group.
Under circumstances in which income taxes are determined on a consolidated
basis by the carrier and other members of the affiliated group, the income
tax expense to be recorded by the carrier shall be the same as would result
if determined for the carrier separately for all time periods, except that
the tax effect of carry-back and carry-forward operating losses, investment
tax credits, or other tax credits generated by operations of the carrier
shall be recorded by the carrier during the period in which applied in
settlement of the taxes otherwise attributable to any member, or combination
of members, of the affiliated group.
(f) Companies that employ average schedules in lieu of actual costs are
exempt from the provisions of this section. For other organizations, the
principles set forth in this section shall apply equally to corporations,
proprietorships, partnerships and other forms of business organizations.
[ 67 FR 5679 , Feb. 6, 2002, as amended at 69 FR 53648 , Sept. 2, 2004]
Subpart C—Instructions for Balance Sheet Accounts
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§ 32.101 Structure of the balance sheet accounts.
top
The Balance Sheet accounts shall be maintained as follows:
(a) Account 1120, Cash and equivalents, through Account 1500, Other
jurisdictional assets—net, shall include assets other than regulated-fixed
assets.
(b) Account 2001, Telecommunications plant in service, through Account 2007,
Goodwill, shall include the regulated-fixed assets.
(c) Account 3100, Accumulated depreciation through Account 3410, Accumulated
amortization—capitalized leases, shall include the asset reserves except
that reserves related to certain asset accounts will be included in the
asset account. (See §§32.2005, 32.2682 and 32.2690.)
(d) Account 4000, Current accounts and notes payable, through Account 4550,
Retained earnings, shall include all liabilities and stockholders equity.
[ 67 FR 5680 , Feb. 6, 2002]
§ 32.102 Nonregulated investments.
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Nonregulated investments shall include the investment in nonregulated
activities that are conducted through the same legal entity as the telephone
company operations, but do not involve the joint or common use of assets or
resources in the provision of both regulated and nonregulated products and
services. See §§32.14 and 32.23.
[ 52 FR 6561 , Mar. 4, 1987]
§ 32.103 Balance sheet accounts for other than regulated-fixed assets to be
maintained.
top
Balance sheet accounts to be maintained by Class A and Class B telephone
companies for other than regulated-fixed assets are indicated as follows:
Balance Sheet Accounts
Account title Class A
account Class B
account
Current assets
Cash and equivalents 1120 1120
Receivables 1170 1170
Allowance for doubtful accounts 1171 1171
Supplies:
Material and supplies 1220 1220
Prepayments 1280 1280
Other current assets 1350 1350
Noncurrent assets
Investments:
Nonregulated investments 1406 1406
Other noncurrent assets 1410 1410
Deferred charges:
Deferred maintenance, retirements and other deferred charges 1438 1438
Other:
Other jurisdictional assets-net 1500 1500
[ 67 FR 5680 , Feb. 6, 2002]
§ 32.1120 Cash and equivalents.
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(a) This account shall include the amount of current funds available for use
on demand in the hands of financial officers and agents, deposited in banks
or other financial institutions and also funds in transit for which agents
have received credit.
(b) This account shall include the amount of cash on special deposit, other
than in sinking and other special funds provided for elsewhere, to pay
dividends, interest, and other debts, when such payments are due one year or
less from the date of deposit; the amount of cash deposited to insure the
performance of contracts to be performed within one year from date of the
deposit; and other cash deposits of a special nature not provided for
elsewhere. This account shall include the amount of cash deposited with
trustees to be held until mortgaged property sold, destroyed, or otherwise
disposed of is replaced, and also cash realized from the sale of the
company's securities and deposited with trustees to be held until invested
in physical property of the company or for disbursement when the purposes
for which the securities were sold are accomplished.
(c) Cash on special deposit to be held for more than one year from the date
of deposit shall be included in Account 1410, Other noncurrent assets.
(d) This account shall include the amount of cash advanced to officers,
agents, employees, and others as petty cash or working funds from which
expenditures are to be made and accounted for.
(e) This account shall include the cost of current securities acquired for
the purpose of temporarily investing cash, such as time drafts receivable
and time loans, bankers' acceptances, United States Treasury certificates,
marketable securities, and other similar investments of a temporary
character.
(f) Accumulated changes in the net unrealized losses of current marketable
equity securities shall be included in the determination of net income in
the period in which they occur in Account 7300, Other Nonoperating Income
and Expense.
(g) Subsidiary record categories shall be maintained in order that the
entity may separately report the amounts of temporary investments that
relate to affiliates and nonaffiliates. Such subsidiary record categories
shall be reported as required by part 43 of this chapter.
[ 67 FR 5681 , Feb. 6, 2002]
§ 32.1170 Receivables.
top
(a) This account shall include all amounts due from customers for services
rendered or billed and from agents and collectors authorized to make
collections from customers. This account shall also include all amounts due
from customers or agents for products sold. This account shall be kept in
such manner as will enable the company to make the following analysis:
(1) Amounts due from customers who are receiving telecommunications service.
(2) Amounts due from customers who are not receiving service and whose
accounts are in process of collection.
(b) Collections in excess of amounts charged to this account may be credited
to and carried in this account until applied against charges for services
rendered or until refunded.
(c) Cost of demand or time notes, bills and drafts receivable, or other
similar evidences (except interest coupons) of money receivable on demand or
within a time not exceeding one year from date of issue.
(d) Amount of interest accrued to the date of the balance sheet on bonds,
notes, and other commercial paper owned, on loans made, and the amount of
dividends receivable on stocks owned.
(e) This account shall not include dividends or other returns on securities
issued or assumed by the company and held by or for it, whether pledged as
collateral, or held in its treasury, in special deposits, or in sinking and
other funds.
(f) Dividends received and receivable from affiliated companies accounted
for on the equity method shall be included in Account 1410, Other noncurrent
assets, as a reduction of the carrying value of the investment.
(g) This account shall include all amounts currently due, and not provided
for in (a) through (g) of this section such as those for traffic
settlements, divisions of revenue, material and supplies, matured rents, and
interest receivable under monthly settlements on short-term loans, advances,
and open accounts. If any of these items are not to be paid currently, they
shall be transferred to Account 1410, Other noncurrent assets.
(h) Subsidiary record categories shall be maintained in order that the
entity may separately report the amounts contained herein that relate to
affiliates and nonaffiliates. Such subsidiary record categories shall be
reported as required by part 43 of this chapter.
[ 67 FR 5681 , Feb. 6, 2002]
§ 32.1171 Allowance for doubtful accounts.
top
(a) This account shall be credited with amounts charged to Accounts 5300,
Uncollectible revenue, and 6790, Provision for uncollectible notes
receivable to provide for uncollectible amounts related to accounts
receivable and notes receivable included in Account 1170, Receivables. There
shall also be credited to this account amounts collected which previously
had been written off through charges to this account and credits to Account
1170. There shall be charged to this account any amounts covered thereby
which have been found to be impracticable of collection.
(b) If no such allowance is maintained, uncollectible amounts shall be
charged directly to Account 5300, Uncollectible revenue or directly to
Account 6790, Provision for uncollectible notes receivable, as appropriate.
(c) Subsidiary record categories shall be maintained in order that the
entity may separately report the amounts contained herein that relate to
affiliates and nonaffiliates. Such subsidiary record categories shall be
reported as required by part 43 of this chapter.
[ 67 FR 5682 , Feb. 6, 2002]
§ 32.1191 Accounts receivable allowance—other.
top
(a) This account shall be credited with amounts charged to Account 5302,
Uncollectible Revenue—Other to provide for uncollectible amounts included in
Account 1190, Other Accounts Receivable. There shall also be credited to
this account amounts collected which previously had been written off through
charges to this account and credits to Account 1190. There shall be charged
to this account any amounts covered thereby which have been found to be
impracticable of collection.
(b) If no such allowance is maintained, uncollectible amounts shall be
charged directly to Account 5302, Uncollectible Revenue—Other.
(c) Subsidiary record categories shall be maintained in order that the
entity may separately report the amounts contained herein that relate to
affiliates and nonaffiliates. Such subsidiary record categories shall be
reported as required by part 43 of this Commission's Rules and Regulations.
§ 32.1220 Inventories.
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(a) This account shall include the cost of materials and supplies held in
stock and inventories of goods held for resale or lease. The investment in
inventories shall be maintained in the following subaccounts:
1220.1 Material and supplies
1220.2 Property held for sale or lease
(b) These subaccounts shall not include items which are related to a
nonregulated activity unless that activity involves joint or common use of
assets and resources in the provision of regulated and nonregulated products
and services.
(c) 1220.1 Material and supplies. This subaccount shall include cost of
material and supplies held in stock including plant supplies, motor vehicles
supplies, tools, fuel, other supplies and material and articles of the
company in process of manufacture for supply stock. (Note also
§32.2000(c)(2)(iii) of this subpart.)
(d) Transportation charges and sales and use taxes, so far as practicable,
shall be included as a part of the cost of the particular material to which
they relate. Transportation and sales and use taxes which are not included
as part of the cost of particular material shall be equitably apportioned
among the detail accounts to which material is charged.
(e) So far as practicable, cash and other discount on material shall be
deducted in determining cost of the particular material to which they relate
or credited to the account to which the material is charged. When such
deduction is not practicable, discounts shall be equitably apportioned among
the detail accounts to which material is charged.
(f) Material recovered in connection with construction, maintenance or
retirement of property shall be charged to this account as follows:
(1) Reusable items that, when installed or in service, were retirement units
shall be included in this account at the original cost, estimated if not
known. (Note also §32.2000(d)(3) of this subpart.)
(2) Reusable minor items that, when installed or in service, were not
retirement units shall be included in this account at current prices new.
(3) The cost of repairing reusable material shall be charged to the
appropriate account in the Plant Specific Operations Expense accounts.
(4) Scrap and nonusable material included in this account shall be carried
at the estimated amount which will be received therefor. The difference
between the amounts realized for scrap and nonusable material sold and the
amounts at which it is carried in this account, so far as practicable, shall
be adjusted in the accounts credited when the material was taken up in this
account.
(g) Interest paid on material bills, the payments of which are delayed,
shall be charged to Account 7500, Interest and related items.
(h) Inventories of material and supplies shall be taken periodically or
frequently enough for reporting purposes, as appropriate, in accordance with
generally accepted accounting principles. The adjustments to this account
shall be charged or credited to Account 6512, Provisioning expense.
(i) 1220.2 Property held for sale or lease. This subaccount shall include
the cost of all items purchased for resale or lease. The cost shall include
applicable transportation charges, sales and use taxes, and cash and other
purchase discounts. Inventory shortage and overage shall be charged and
credited, respectively, to Account 5280, Nonregulated operating revenue.
[ 52 FR 39534 , Oct. 22, 1987, as amended at 53 FR 49322 , Dec. 7, 1988; 67 FR 5682 , Feb. 6, 2002]
§ 32.1280 Prepayments.
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This account shall include:
(a) The amounts of rents paid in advance of the period in which they are
chargeable to income, except amounts chargeable to telecommunications plant
under construction and minor amounts which may be charged directly to the
final accounts. As the term expires for which the rents are paid, this
account shall be credited monthly and the appropriate account charged.
(b) The balance of all taxes, other than amounts chargeable to
telecommunication plant under construction and minor amounts which may be
charged to the final accounts, paid in advance and which are chargeable to
income within one year. As the term expires for which the taxes are paid,
this account shall be credited monthly and the appropriate account charged.
(c) The amount of insurance premiums paid in advance of the period in which
they are chargeable to income, except premiums chargeable to
telecommunications plant under construction and minor amounts which may be
charged directly to the final accounts. As the term expires for which the
premiums are paid, this account shall be credited monthly and the
appropriate account charged.
(d) The cost of preparing, printing, binding, and delivering directories and
the cost of soliciting advertisements for directories, except minor amounts
which may be charged directly to Account 6622, Number services. These
prepaid directory expenses shall be cleared to Account 6622 by monthly
charges representing that portion of the expenses applicable to each month.
(e) Other prepayments not included in paragraphs (a) through (d) of this
section except for minor amounts which may be charged directly to the final
accounts. As the term expires for which the payments apply, this account
shall be credited monthly and the appropriate account charged.
[ 67 FR 5682 , Feb. 6, 2002, as amended at 69 FR 53648 , Sept. 2, 2004]
§ 32.1350 Other current assets.
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This account shall include the amount of all current assets which are not
includable in Accounts 1120 through 1280.
[ 67 FR 5682 , Feb. 6, 2002]
§ 32.1406 Nonregulated investments.
top
This account shall include the carrier's investment in nonregulated
activities accounted for in a separate set of books as provided in
§32.23(b).
[ 52 FR 6561 , Mar. 4, 1987; 52 FR 39535 , Oct. 22, 1987, as amended as 67 FR 5682 , Feb. 6, 2002]
§ 32.1410 Other noncurrent assets.
top
(a) This account shall include the acquisition cost of the company's
investment in equity or other securities issued or assumed by affiliated
companies, including securities held in special funds (sinking funds). The
carrying value of the investment (securities) accounted for on the equity
method shall be adjusted to recognize the company's share of the earnings or
losses and dividends received or receivable of the affiliated company from
the date of acquisition. (Note also Account 1170, Receivables, and Account
7300, Nonoperating income and expense.)
(b) This account shall include the acquisition cost of the Company's
investment in securities issued or assumed by nonaffiliated companies and
individuals, and also its investment advances to such parties and special
deposits of cash for more than one year from date of deposit.
(c) Declines in value of investments, including those accounted for under
the cost method, shall be charged to Account 4540, Other capital, if
temporary and as a current period loss if permanent. Detail records shall be
maintained to reflect unrealized losses for each investment.
(d) This account shall also include advances represented by book accounts
only with respect to which it is agreed or intended that they shall be
either settled by issuance of capital stock or debt; or shall not be subject
to current cost settlement.
(e) Amounts due from affiliated and nonaffiliated companies which are
subject to current settlement shall be included in Account 1170,
Receivables.
(f) This account shall include the total unamortized balance of debt
issuance expense for all classes of outstanding long-term debt. Amounts
included in this account shall be amortized monthly and charged to account
7500, Interest and related items.
(g) Debt Issuance expense includes all expenses in connection with the
issuance and sale of evidence of debt, such as fees for drafting mortgages
and trust deeds; fees and taxes for issuing or recording evidences of debt;
costs of engraving and printing bonds, certificates of indebtedness, and
other commercial paper; fees paid trustees; specific costs of obtaining
governmental authority; fees for legal services; fees and commissions paid
underwriters, brokers, and salesmen; fees and expenses of listing on
exchanges, and other like costs. A subsidiary record shall be kept of each
issue outstanding.
(h) This account shall include the amount of cash and other assets which are
held by trustees or by the company's treasurer in a distinct fund, for the
purpose of redeeming outstanding obligations. Interest or other income
arising from funds carried in this account shall generally be charged to
this account. A subsidiary record shall be kept for each sinking fund which
shall designate the obligation in support of which the fund was created.
(i) This account shall include the amount of all noncurrent assets which are
not includable in paragraphs (a) through (h) of this section.
(j) A subsidiary record shall be kept identifying separately common stocks,
preferred stocks, long-term debt, advances to affiliates, and investment
advances. A subsidiary record shall also be kept identifying special
deposits of cash for more than one year from the date of deposit. Further,
the company's record shall identify the securities pledged as collateral for
any of the company's long-term debt or short-term loans or to secure
performance of contracts.
(k) Subsidiary record categories shall be maintained in order that the
entity may separately report the amounts contained herein that relate to the
equity method and the cost method. Such subsidiary record categories shall
be reported as required by part 43 of this chapter.
[ 67 FR 5682 , Feb. 6, 2002]
§ 32.1438 Deferred maintenance and retirements.
top
(a) This account shall include such items as:
(1) The unprovided-for loss in service value of telecommunications plant for
extraordinary nonrecurring retirement not considered in depreciation and the
cost of extensive replacements of plant normally chargeable to the current
period Plant Specific Operations Expense accounts. These charges shall be
included in this account only upon direction or approval from this
Commission. However, the company's application to this Commission for such
approval shall give full particulars concerning the property retired, the
extensive replacements, the amount chargeable to operating expenses and the
period over which in its judgment the amount of such charges should be
distributed.
(2) Unaudited amounts and other debit balances in suspense that cannot be
cleared and disposed of until additional information is received; the
amount, pending determination of loss, of funds on deposit with banks which
have failed; revenue, expense, and income items held in suspense; amounts
paid for options pending final disposition.
(3) Cost of preliminary surveys, plans, investigation, etc., made for
construction projects under contemplation. If the projects are carried out,
the preliminary costs shall be included in the cost of the plant
constructed. If the projects are abandoned, the preliminary costs shall be
charged to Account 7300, Nonoperating income and expense.
(4) Cost of evaluations, inventories, and appraisals taken in connection
with the acquisition or sale of property. If the property is subsequently
acquired, the preliminary costs shall be accounted for as a part of the cost
of acquisition, or if it is sold, such costs shall be deducted from the sale
price in accounting for the property sold. If purchases or sales are
abandoned, the preliminary costs included herein (including options paid, if
any) shall be charged to Account 7300.
(b) Charges provided for in paragraph (a) of this section shall be included
in this account only upon direction or approval from this Commission.
However, the company's application to this Commission for such approval
shall give full particulars concerning the property retired, the extensive
replacements, the amount chargeable to operating expenses and the period
over which in its judgment the amount of such charges should be distributed.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5683 , Feb. 6, 2002]
§ 32.1500 Other jurisdictional assets—net.
top
This account shall include the cumulative impact on assets of jurisdictional
ratemaking practices which vary from those of this Commission. All entries
recorded in this account shall be recorded net of any applicable income tax
effects and shall be supported by subsidiary records where necessary as
provided for in §32.13(e) of subpart B.
§ 32.2000 Instructions for telecommunications plant accounts.
top
(a) Purpose of telecommunications plant accounts. (1) The telecommunications
plant accounts (2001 to 2007 inclusive) are designed to show the investment
in the company's tangible and intangible telecommunications plant which
ordinarily has a service life of more than one year, including such plant
whether used by the company or others in providing telecommunications
service.
(2) The telecommunications plant accounts shall not include the cost or
other value of telecommunications plant contributed to the company.
Contributions in the form of money or its equivalent toward the construction
of telecommunications plant shall be credited to the accounts charged with
the cost of such construction. Amounts of non-recurring reimbursements based
on the cost of plant or equipment furnished in rendering service to a
customer shall be credited to the accounts charged with the cost of the
plant or equipment. Amounts received for construction which are ultimately
to be repaid wholly or in part, shall be credited to Account 4300, Other
long-term liabilities and deferred credits; when final determination has
been made as to the amount to be returned, any unrefunded amounts shall be
credited to the accounts charged with the cost of such construction. Amounts
received for the construction of plant, the ownership of which rests with or
will revert to others, shall be credited to the accounts charged with the
cost of such construction. (Note also Account 7100, Other operating income
and expense.)
(3) When telecommunications plant ordinarily having a service life of more
than one year is installed for temporary use in providing telecommunications
service, it shall be accounted for in the same manner as plant having a
service life of more than one year. This includes temporary installations of
plant (such as poles, wire and cable) installed to maintain service during
the progress of highway reconstruction or during interruptions due to storms
or other casualties, equipment used for the training of operators, equipment
used to provide intercepting positions in central offices to handle traffic
for a short period following extensive system changes and similar
installations of property used to provide telecommunications service.
(4) The cost of the individual items of equipment, classifiable to Accounts
2112, Motor vehicles; 2113, Aircraft; 2114, Tools and other work equipment;
2122, Furniture; 2123, Office equipment; 2124, General purpose computers,
costing $2,000 or less or having a life of less than one year shall be
charged to the applicable expense accounts, except for personal computers
falling within Account 2124. Personal computers classifiable to Account
2124, with a total cost for all components of $500 or less, shall be charged
to the applicable Plant Specific Operations Expense accounts. The cost of
tools and test equipment located in the central office, classifiable to
central office asset accounts 2210–2232 costing $2,000 or less or having a
life of less than one year shall be charged to the applicable Plant Specific
Operations Expense accounts. If the aggregate investment in the items is
relatively large at the time of acquisition, such amounts shall be
maintained in an applicable material and supplies account until items are
used.
(b) Telecommunications plant acquired. (1) Property, plant and equipment
acquired from an entity, whether or not affiliated with the accounting
company, shall be accounted for at original cost, except that property,
plant and equipment acquired from a nonaffiliated entity shall be accounted
for at acquisition cost if the purchase price is less than $100,000 for
Class A companies or $25,000 for Class B companies.
(2) The accounting for property, plant and equipment to be recorded at
original cost shall be as follows:
(i) The amount of money paid (or current money value of any consideration
other than money exchanged) for the property (together with preliminary
expenses incurred in connection the acquisition) shall be charged to Account
1438, Deferred maintenance, retirements, and other deferred charges.
(ii) The original cost, estimated if not known, of telecommunications plant,
governmental franchises and other similar rights acquired shall be charged
to the applicable telecommunications plant accounts, Telecommunications
Plant Under Construction, and Property Held For Future Telecommunications
Use, as appropriate, and credited to Account 1439. When the actual original
cost cannot be determined and estimates are used, the company shall be
prepared to furnish the Commission with the particulars of such estimates.
(iii) Accumulated Depreciation and amortization balances related to plant
acquired shall be credited to Account 3100, Accumulated depreciation, or
Account 3200, Accumulated depreciation—held for future telecommunications
use, or Account 3410, Accumulated amortization—capitalized leases and
debited to Account 1438. Accumulated amortization balances related to plant
acquired which ultimately is recorded in Accounts 2005, Telecommunications
plant adjustment, Account 2682, Leasehold improvements, or Account 2690,
Intangibles shall be credited to these asset accounts, and debited to
Account 1438.
(iv) Any amount remaining in Account 1438, applicable to the plant acquired,
shall, upon completion of the entries provided in paragraphs (b)(2)(i)
through (b)(2)(iii) of this section, be debited or credited, as applicable,
to Account 2007, Goodwill, or to Account 2005, Telecommunications plant
adjustment, as appropriate.
(3) A memorandum record shall be kept showing the amount of contributions in
aid of construction applicable to the property acquired as shown by the
accounts of the previous owner.
(c) Cost of construction. (1) Telecommunications plant represents an
economic resource which will be used to provide future services, the cost of
which will be allocated in a rational and systematic manner to the future
periods in which it provides benefits. In accounting for construction costs,
the utility shall charge to the telecommunications plant accounts, where
applicable, all direct and indirect costs.
(2) Direct and indirect costs shall include, but not be limited to:
(i) “Labor” includes the wages and expenses of employees directly engaged in
or in direct charge of construction work. It includes expenses directly
related to an employee's wages, such as worker's compensation insurance,
payroll taxes, benefits and other similar items of expense.
(ii) “Engineering” includes the portion of the wages and expenses of
engineers, draftsmen, inspectors, and their direct supervision applicable to
construction work. It includes expenses directly related to an employee's
wages, such as worker's compensation insurance, payroll taxes, benefits and
other similar items of expense.
(iii) “Material and supplies” includes the purchase price of material used
at the point of free delivery plus the costs of inspection, loading and
transportation, and an equitable portion of provisioning expense. In
determining the cost of material used, proper allowance shall be made for
unused material, for material recovered from temporary structures used in
performing the work involved, and for discounts allowed and realized in the
purchase of material. This item does not include construction material that
is stolen or rendered unusable due to vandalism. Such material should be
charged to the applicable plant specific operations expense accounts.
(iv) “Transportation” includes the cost of transporting employees, material
and supplies, tools and other work equipment to and from the physical
construction location. It includes amounts paid therefor to other companies
or individuals and the cost of using the company's own motor vehicles or
other transportation equipment.
(v) “Contract work” includes amounts paid for work performed under contract
or other agreement by other companies, firms or individuals; engineering and
supervision applicable to such work; cost incident to the award of
contracts; and the inspection of such work. The cost of construction work
performed by affiliated companies and other details relating thereto shall
be available from the work in progress and supporting records.
(vi) “Protection” includes the cost of protecting the company's property
from fire or other casualties and the cost of preventing damages to others
or the property of others.
(vii) “Privileges, Permits, and Rights of way” includes such costs incurred
in obtaining these privileges, permits, or rights of way in connection with
construction work, such as for use of private property, streets or highways.
The cost of such privileges and permits shall be included in the cost of the
work for which the privileges or permits are obtained, except for costs
includable in Account 2111, Land, and Account 2690, Intangibles.
(viii) “Taxes” includes taxes properly includable in construction costs
before the facilities are completed for service, which taxes are assessed
separately from taxes on operating property or under conditions that permit
separate identification of the amount chargeable to construction.
(ix) “Special machine service” includes the cost of labor expended,
materials and supplies consumed and other expenses incurred in the
maintenance, operation and use of special and other labor saving machines
(other than transportation equipment (such as trenching equipment, cable
plows and pole setting trucks. Also included are expenditures for rental,
maintenance and operation of such machines owned by others. When a
construction job requires the purchase of special machines, the cost
thereof, less the appraised or salvage value at the time of release from the
job, shall be included in the cost of construction.
(x) Allowance for funds used during construction (“AFUDC”) provides for the
cost of financing the construction of telecommunications plant. AFUDC shall
be charged to Account 2003, Telecommunications plant under construction, and
credited to Account 7300, Nonoperating income and expense. The rate for
calculating AFUDC shall be determined as follows: If financing plans
associate a specific new borrowing with an asset, the rate on that borrowing
may be used for the asset; if no specific new borrowing is associated with
an asset or if the average accumulated expenditures for the asset exceed the
amounts of specific new borrowing associated with it, the capitalization
rate to be applied to such excess shall be the weighted average of the rates
applicable to other borrowings of the enterprise. The amount of interest
cost capitalized in an accounting period shall not exceed the total amount
of interest cost incurred by the company in that period.
(xi) “Insurance” includes premiums paid specifically for protection against
loss and damage in connection with the construction of telecommunications
plant due to fire or other casualty, injury to or death of employees or
others, damages to property of others, defalcations of employees and agents
and the non-performance of contractual obligations of others.
(xii) “Construction services” include the cost of telephone, electricity,
power, construction quarters, office space and equipment directly related to
the construction project.
(xiii) “Indirect construction costs” shall include indirect costs such as
general engineering, supervision and support. Such costs, in addition to
direct supervision, shall include indirect plant operations and engineering
supervision up to, but not including, supervision by executive officers
whose pay and expenses are chargeable to Account 6720, General and
administrative. The records supporting the entries for indirect construction
costs shall be kept so as to show the nature of the expenditures, the
individual jobs and accounts charged, and the bases of the distribution. The
amounts charged to each plant account for indirect costs shall be readily
determinable. The instructions contained herein shall not be interpreted as
permitting the addition to plant of amounts to cover indirect costs based on
arbitrary allocations.
(xiv) The cost of construction shall not include any amounts classifiable as
Corporate Operations Expense.
(d) Telecommunications plant retired. (1) Telecommunications plant accounts
shall at all times disclose the original cost of all property in service.
When any item of property subject to plant retirement accounting is worn
out, lost, sold, destroyed, abandoned, surrendered upon lapse of title,
becomes permanently unserviceable, is withdrawn or for any other reason is
retired from service, the plant accounts applicable to that item shall be
credited with the original cost of the plant retired whether replaced or not
(except as provided for minor items in paragraph (d)(2)(ii) of this
section). Normally, these retirement credits with respect to such plant as
entire buildings, entire central offices, all plant abandoned and any large
sections of plant withdrawn from service, shall be entered in the accounts
for the month in which use of the property ceased. For any other plant
withdrawn from service, the retirement credits shall be entered no later
than the next succeeding month. Literal compliance with the provision for
timing of entries with respect to property amounting to less than $50,000
retired under any one project is not required if an unreasonable amount of
recordkeeping and estimating of quantities, original costs and salvage is
necessary. The retirement entry shall refer to the continuing property
record, or records supplemental thereto, from which the cost was obtained
(note also paragraph (d)(3) of this section). Every company shall establish
procedures which will ensure compliance with these requirements.
(2) To avoid undue refinement, depreciable telecommunications plant shall be
accounted for as follows:
(i) Retirement units: This group includes major items of property, a
representative list of which shall be prescribed by this Commission. In lieu
of the retirement units prescribed with respect to a particular account, a
company may, after obtaining specific approval by this Commission, establish
and maintain its own list of retirement units for a portion or all of the
plant in any such account. For items included on the retirement units list,
the original cost of any such items retired shall be credited to the plant
account and charged to Account 3100 Accumulated Depreciation, whether or not
replaced. The original cost of retirement units installed in place of
property retired shall be charged to the applicable telecommunications plant
account.
(ii) Minor items: This group includes any part or element of plant which is
not designated as a retirement unit. The original cost of a minor item of
property when included in the specific or average cost for a retirement unit
or units requires no separate credit to the telecommunications plant account
when such a minor item is retired. The cost of replacement shall be charged
to the account applicable for the cost of repairs of the property. However,
if the replacement effects a substantial betterment (the primary aim of
which is to make the property affected more useful, of greater durability,
of greater capacity or more economical in operation), the excess cost of
such a replacement, over the estimated cost at the then current prices of
replacement without betterment of the minor items being retired, shall be
charged to the applicable telecommunications plant account.
(3) The cost of property to be retired shall be the amount at which property
is included in the telecommunications plant accounts. However, when it is
impracticable to determine the cost of each item due to the relatively large
number or small cost of such items, the average cost of all the items
covered by an appropriate subdivision of the account shall be used in
determining the cost to be assigned to such items when retired. The method
used in determining average cost must give due regard to the quantity,
vintage, size and kind of items, the area in which they were installed and
their classification in other respects. Average cost may be applied in
retirement of such items as poles, wire, cable, cable terminals, conduit and
booths. Any company may use average cost of property installed in a year or
band of years as approved by the Commission. It should be understood,
however, that the use of average costs shall not relieve the company of the
requirement for maintaining its continuing property records to show, where
practicable, dates of installation and removal for purposes of mortality
studies. (See §32.2000(f) of this subpart, Standard Practices for
Establishing and Maintaining Continuing Property Records.)
(4) The accounting for the retirement of property, plant and equipment shall
be as provided above except that amounts in Account 2111, Land, and amounts
for works of art recorded in Account 2122, Furniture, shall be treated at
disposition as a gain or loss and shall be credited or debited to Account
7100, Other operating income and expense, as applicable. If land or artwork
is retained by the company and held for sale, the cost shall be charged to
Account 2006, Nonoperating plant.
(5) When the telecommunications plant is sold together with traffic
associated therewith, the original cost of the property shall be credited to
the applicable plant accounts and the estimated amounts carried with respect
thereto in the accumulated depreciation and amortization accounts shall be
charged to such accumulated accounts. The difference, if any, between the
net amount of such debit and credit items and the consideration received
(less commissions and other expenses of making the sale) for the property
shall be included in Account 7300, Nonoperating income and expense. The
accounting for depreciable telecommunications plant sold without the traffic
associated therewith shall be in accordance with the accounting provided in
§32.3100(c).
(e) Basic property records. (1) The basic property records are that portion
of the total property accounting system which preserves the following
detailed information:
(i) The identity, vintage, location and original cost of units of property;
(ii) Original and ongoing transactional data (plant account activity) in
terms of such units; and
(iii) Any other specific financial and cost accounting information not
properly warranting separate disclosure as an account or subaccount but
which is needed to support regulatory, cost, tax, management and other
specific accounting information needs and requirements.
(2) The basic property records must be: (i) Subject to internal accounting
controls, (ii) auditable, (iii) equal in the aggregate to the total
investment reflected in the financial property control accounts as well as
the total of the cost allocations supporting the determination of
cost-of-service at any particular point in time, and (iv) maintained
throughout the life of the property.
(3) The basic property records shall consist of (i) continuing property
records and (ii) records supplemental thereto which together reveal clearly,
by accounting area, the detailed and systematically summarized information
necessary to meet fully the requirements of paragraphs (e)(1) and (e)(2) of
this section.
(4) Companies shall establish and maintain basic property records for each
class of property recorded in the several plant accounts which comprise the
balance sheet Account 2001, Telecommunications Plant In Service, Account
2002, Property Held for Future Telecommunications Use, and Account 2006,
Nonoperating Plant.
(5) The company shall notify the Commission of a plan for the basic property
record as follows:
(i) Not later than June 30 of the year following that in which it becomes
subject to this system of accounts, the company shall file with the
Commission two (2) copies of a complete plan of the method to be used in the
compilation of a basic property record with respect to each class of
property. The plan shall include a list of proposed accounting areas
accompanied by description of the boundaries of each area as defined in
accordance with the requirements of §32.2000(f)(1) (i) and (ii) of this
subpart. The plan shall also include a list of property record units
proposed for use under each regulated plant account. These property record
units shall be selected such that the requirements of §32.2000(f)(2) (i),
(ii) and (iii) of this subpart can be satisfied.
(ii) The company shall submit to the Commission one copy of any major
proposed changes in its basic property record plan at least 30 days before
the effective date of the proposed changes.
(6) The company shall prepare and maintain the basic property record as
follows:
(i) Not later than June 30 of the year following that in which the company
becomes subject to this system of accounts, begin the preparation of a basic
property record.
(ii) Complete within two years of the prescribed beginning date, basic
property records for all property as of the end of the preceding calendar
year.
(iii) Promptly process in the basic property records all property changes
affecting periods subsequent to initial establishment of the basic property
record.
(7) The basic property record components (see paragraph (c) of this section)
shall be arranged in conformity with the regulated plant accounts prescribed
in this section of accounts as follows:
(i) The continuing property records shall be compiled on the basis of
original cost (or other book cost consistent with this system of accounts).
The continuing property records shall be maintained as prescribed in
§32.2000(f)(2)(iii) of this subpart in such manner as will meet the
following basic objectives:
(A) Provide for the verification of property record units by physical
examination.
(B) Provide for accurate accounting for retirements.
(C) Provide data for use in connection with depreciation studies.
(ii) The records supplemental to the continuing property records shall
disclose such service designations, usage measurement criteria,
apportionment factors, or other data as may be prescribed by the Commission
in this part or other parts of its Rules and Regulations. Such data are
subject to the same general controls and standards for auditability and
support as are all other elements of the basic property records.
(f) Standard practices for establishing and maintaining continuing property
records —(1) Accounting area. (i) The continuing property record, as related
to each primary plant account, shall be established and maintained by
subaccounts for each accounting area. An accounting area is the smallest
territory of the company for which accounting records of investment are
maintained for all plant accounts within the area. Areas already established
for administrative, accounting, valuation, or other purposes may be adopted
for this purpose when appropriate. In no case shall the boundaries of
accounting areas cross either State lines or boundaries prescribed by the
Commission.
(ii) In determining the limit of each area, consideration shall be given to
the quantities of property, construction conditions, operating districts,
county and township lines, taxing district boundaries, city limits, and
other political or geographical limits, in order that the area adopted may
have maximum adaptability, within the confines of practicability, for both
the company's purpose and those of Federal, State, and municipal
authorities.
(2) Property record units. (i) In each of the established accounting areas,
the “property record units” which are to be maintained in the continuing
property record shall be set forth separately, classified by size and type
with the amount of original cost (or other appropriate book cost) associated
with such units. When a list of property record units has been accepted by
the Commission, they shall become the units referred to in this statement of
standard practices. Such units shall apply to only the regulated portion of
this system of accounts.
(ii) When it is found necessary to revise this list because of the addition
of units used in providing new types of service, or new units resulting from
improvements in technology, or because of the grouping or elimination of
units which no longer merit separate recognition as property record units,
one copy of such changes shall be submitted to the Commission. Upon
appropriate showing by the company, the Commission may specifically exempt
the company from these filing requirements.
(iii) The continuing property record shall reveal the description, location,
date of placement, the essential details of construction, and the original
cost (note also §32.2000(f)(3) of this subpart) of the property record
units. The continuing property record and other underlying records of
construction costs shall be so maintained that, upon retirement of one or
more retirement units or of minor items without replacement when not
included in the costs of retirement units, the actual cost or a reasonably
accurate estimate of the cost of the plant retired can be determined.
(3) Methods of determining original cost of property record units. The
original cost of the property record units shall be determined by analyses
of the construction costs incurred as shown by completion reports and other
data, accumulated in the respective construction work orders or
authorizations. Costs shall be allocated to and associated with the property
record units to facilitate accounting for retirements. The original cost of
property record units shall be determined by unit identification or
averaging as described in paragraphs (f)(3) (i) and (ii) of this section.
(i) Unit identification. Cost shall be identified and maintained by specific
location for property record units contained within certain regulated plant
accounts or account groupings such as Land, Buildings, Central Office
Assets, Motor Vehicles, garage work equipment included in Account 2114,
Tools and other work equipment, and Furniture. In addition, units involved
in any unusual or special type of construction shall be recorded by their
specific location costs (note also §32.2000(f)(3)(ii)(B)).
(ii) Averaging. (A) Average costs may be developed for plant consisting of a
large number of similar units such as terminal equipment, poles, wire,
cable, cable terminals, conduit, furniture, and work equipment. Units of
similar size and type within each specified accounting area and regulated
plant account may be grouped. Each such average cost shall be set forth in
the continuing property record of the units with which it is associated.
(B) The averaging of costs permitted under the provisions of the foregoing
paragraph is restricted to plant installed in a particular vintage or band
of years incurred within an accounting area. This paragraph does not permit
the inclusion of the cost of units involved in any unusual or special type
of construction. The units involved in such unusual or special type of
construction shall be recorded at cost by location.
(4) Estimates. In cases where the actual original cost of property cannot be
ascertained, such as pricing an inventory for the initial entry of a
continuing property record or the pricing of an acquisition for which a
continuing property record has not been maintained, the original cost may be
estimated. Any estimated original cost shall be consistent with the
accounting practices in effect at the time the property was constructed.
(5) Identification of property record units. There shall be shown in the
continuing property record or in record supplements thereof, a complete
description of the property records units in such detail as to identify such
units. The description shall include the identification of the work order
under which constructed, the year of installation (unless not determinable
per §32.2000(f)(4) of this subpart, specific location of the property within
each accounting area in such manner that it can be readily spot-checked for
proof of physical existence, the accounting company's number or designation,
and any other description used in connection with the determination of the
original cost. Descriptions of units of similar size and type shall follow
prescribed groupings.
(6) Reinstalled units. When units to which average costs are not applied,
i.e., specific and fixed location units, are removed or retired and
subsequently reinstalled, the date when the unit was first charged to the
appropriate plant account shall, when required for adequate service life
studies and reasonably accurate retirement accounting, be shown in addition
to the date of reinstallation.
(7) Age and service life of property. The continuing property record shall
disclose the age of existing property and the supporting records shall
disclose the service life of property retired. Exceptions from this
requirement for any property record unit shall be submitted to the
Commission for approval.
(8) Reference to sources of information. There shall be shown by appropriate
reference the source of all entries. All drawings, computations, and other
detailed records which support quantities and costs or estimated costs shall
be retained as a part of or in support of the continuing property record.
(9) Jointly owned property. (i) With respect to jointly owned property,
there shall be shown in the continuing property record or records
supplemental thereto:
(A) The identity of all joint owners.
(B) The percentage owned by the accounting company.
(ii) When regulated plant is constructed under arrangements for joint
ownership, the amount received by the constructing company from the other
joint owner or owners shall be credited as a reduction of the gross cost of
the plant in place.
(iii) When a sale of a part interest in regulated plant is made, the
fractional interest sold shall be treated as a retirement and the amount
received shall be treated as salvage. The continuing property record or
records supplemental thereto shall be so maintained as to identify
separately retirements of this nature from physical retirements of jointly
owned plant.
(iv) If jointly owned regulated property is substantial in relation to the
total of the same kind of regulated property owned wholly by the company,
such jointly owned regulated property shall be appropriately segregated in
the continuing property record.
(g) Depreciation accounting —(1) Computation of depreciation rates. (i)
Unless otherwise provided by the Commission, either through prior approval
or upon prescription by the Commission, depreciation percentage rates shall
be computed in conformity with a group plan of accounting for depreciation
and shall be such that the loss in service value of the property, except for
losses excluded under the definition of depreciation, may be distributed
under the straight-line method during the service life of the property.
(ii) In the event any composite percentage rate becomes no longer
applicable, revised composite percentage rates shall be computed in
accordance with paragraph (g)(1)(i) of this section.
(iii) The company shall keep such records of property and property
retirements as will allow the determination of the service life of property
which has been retired, or facilitate the determination of service life
indications by mortality, turnover, or other appropriate methods. Such
records will also allow the determination of the percentage of salvage value
and cost of removal for property retired from each class of depreciable
plant.
(2) Depreciation charges. (i) A separate annual percentage rate for each
depreciation category of telecommunications plant shall be used in computing
depreciation charges.
(ii) Companies, upon receiving prior approval from this Commission, or, upon
prescription by this Commission, shall apply such depreciation rate, except
where provisions of paragraph (g)(2)(iv) of this section apply, as will
ratably distribute on a straight line basis the difference between the net
book cost of a class or subclass of plant and its estimated net salvage
during the known or estimated remaining service life of the plant.
(iii) Charges for currently accruing depreciation shall be made monthly to
the appropriate depreciation accounts, and corresponding credits shall be
made to the appropriate depreciation reserve accounts. Current monthly
charges shall normally be computed by the application of one-twelfth of the
annual depreciation rate to the monthly average balance of the associated
category of plant. The average monthly balance shall be computed using the
balance as of the first and last days of the current month.
(iv) In certain circumstances and upon prior approval of this Commission,
monthly charges may be determined in total or in part through the use of
other methods whereby selected plant balances or portions thereof are
ratably distributed over periods prescribed by this Commission. Such
circumstances could include but not be limited to factors such as the
existence of reserve deficiencies or surpluses, types of plant that will be
completely retired in the near future, and changes in the accounting for
plant. Where alternative methods have been used in accordance with this
subparagraph, such amounts shall be applied separately or in combination
with rates determined in accordance with paragraph (g)(2)(ii) of this
section.
(3) Acquired depreciable plant. When acquired depreciable plant carried in
Account 1438, Deferred maintenance, retirements and other deferred charges,
is distributed to the appropriate plant accounts, adjusting entries shall be
made covering the depreciation charges applicable to such plant for the
period during which it was carried in Account 1438.
(4) Plant Retired for Nonrecurring Factors not Recognized in Depreciation
Rates.
(i) A retirement will be considered as nonrecurring (extraordinary) only if
the following criteria are met:
(A) The impending retirement was not adequately considered in setting past
depreciation rates.
(B) The charging of the retirement against the reserve will unduly deplete
that reserve.
(C) The retirement is unusual such that similar retirements are not likely
to recur in the future.
(5) Upon direction or approval from this Commission, the company shall
credit Account 3100, Accumulated Depreciation, and charge Account 1438,
Deferred Maintenance, retirements and other deferred charges, with the
unprovided-for loss in service value. Such amounts shall be distributed from
Account 1438 to Account 6561, Depreciation expense—Telecommunications plant
in service, or Account 6562, Depreciation expense—property held for future
telecommunications use, over such period as this Commission may direct or
approve.
(h) Amortization accounting. (1) Unless otherwise provided by this
Commission, either through approval, or upon prescription by this
Commission, amortization shall be computed on the straight-line method,
i.e., equal annual amounts shall be applied. The cost of each type asset
shall be amortized on the basis the estimated life of that asset and shall
not be written off in the accounting period in which the asset is acquired.
A reasonable estimate of the useful life may be based on the upper or lower
limits even though a fixed existence is not determinable. However, the
period of amortization shall not exceed forty years.
(2) In the event any estimated useful life becomes no longer applicable, a
revised estimated useful life shall be determined in accordance with
paragraph (h)(1) of this section.
(3) Amortization charges shall be made monthly to the appropriate
amortization expense accounts and corresponding credits shall be made to
accounts 2005, 2682, 2690, and 3410, as appropriate. Monthly charges shall
be computed by the application of one-twelfth to the annual amortization
amount.
(4) The company shall keep such records as will allow the determination of
the useful life of the asset.
(i) Accounting for software. The original cost of initial operating system
software for computers shall be classified to the same account as the
associated hardware whether acquired separately or in conjunction with the
associated hardware.
(j) Plant Accounts to be Maintained by Class A and Class B telephone
companies as indicated:
Account title Class A
account Class B
account
Regulated plant
Property, plant and equipment:
Telecommunications plant in service ^12001 ^12001
Property held for future telecommunications use 2002 2002
Telecommunications plant under construction-short term 2003 2003
Telecommunications plant adjustment 2005 2005
Nonoperating plant 2006 2006
Goodwill 2007 2007
Telecommunications plant in service (TPIS)
TPIS—General support assets:
Land and support assets 2110
Land 2111
Motor vehicles 2112
Aircraft 2113
Tools and other work equipment 2114
Buildings 2121
Furniture 2122
Office equipment 2123
General purpose computers 2124
TPIS—Central Office assets:
Central Office—switching 2210
Non-digital switching 2211
Digital electronic switching 2212
Operator systems 2220 2220
Central Office—transmission 2230
Radio systems 2231
Circuit equipment 2232
TPIS—Information origination/termination assets:
Information origination termination 2310
Station apparatus 2311
Customer premises wiring 2321
Large private branch exchanges 2341
Public telephone terminal equipment 2351
Other terminal equipment 2362
TPIS—Cable and wire facilities assets:
Cable and wire facilities 2410
Poles 2411
Aerial cable 2421
Underground cable 2422
Buried cable 2423
Submarine and deep sea cable 2424
Intrabuilding network cable 2426
Aerial wire 2431
Conduit systems 2441
TPIS—Amortizable assets:
Amortizable tangible assets 2680
Capital leases 2681
Leasehold improvements 2682
Intangibles 2690 2690
^1Balance sheet summary account only.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 7580 , Mar. 12, 1987; 53 FR 30059 , Aug. 10, 1988; 59 FR 46930 , Sept. 13, 1994; 60 FR 12138 , Mar. 6,
1995; 62 FR 39451 , July 23, 1997; 64 FR 50007 , Sept. 15, 1999; 67 FR 5683 ,
Feb. 6, 2002; 69 FR 53648 , Sept. 2, 2004]
Effective Date Note: At 64 FR 50007 , Sept. 15, 1999, §32.2000 was amended
by removing paragraph (b)(4). This section contains information collection
requirements and will not become effective until approved by the Office of
Management and Budget.
§ 32.2001 Telecommunications plant in service.
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This account shall include the original cost of the investment included in
Accounts 2110 through 2690.
§ 32.2002 Property held for future telecommunications use.
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(a) This account shall include the original cost of property owned and held
for no longer than two years under a definite plan for use in
telecommunications service. If at the end of two years the property is not
in service, the original cost of the property may remain in this account so
long as the carrier excludes the original cost and associated depreciation
from its ratebase and ratemaking considerations and report those amounts in
reports filed with the Commission pursuant to 43.21(e)(1) and 43.21(e)(2) of
this chapter.
(b) Subsidiary records shall be maintained to show the character of the
amounts carried in this account.
[ 65 FR 16334 , Mar. 28, 2000]
§ 32.2003 Telecommunications plant under construction.
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(a) This account shall include the original cost of construction projects
(note also §32.2000(c)) of this part and the cost of software development
projects that are not yet ready for their intended use.
(b) There may be charged directly to the appropriate plant accounts the cost
of any construction project which is estimated to be completed and ready for
service within two months from the date on which the project was begun.
There may also be charged directly to the plant accounts the cost of any
construction project for which the gross additions to plant are estimated to
amount to less than $100,000.
(c) If a construction project has been suspended for six months or more, the
cost of the project included in this account may remain in this account so
long as the carrier excludes the original cost and associated depreciation
from its ratebase and ratemaking considerations and reports those amounts in
reports filed with the Commission pursuant to §§43.21(e)(1) and 43.21(e)(2)
of this chapter. If a project is abandoned, the cost included in this
account shall be charged to Account 7300, Nonoperating income and expense.
(d) When any telecommunications plant, the cost of which has been included
in this account, is completed ready for service, the cost thereof shall be
credited to this account and charged to the appropriate telecommunications
plant or other accounts.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 60 FR 12138 , Mar. 6, 1995; 64 FR 50007 , Sept. 15, 1999; 65 FR 16335 , Mar. 28, 2000; 67 FR 5685 , Feb. 6, 2002]
§ 32.2005 Telecommunications plant adjustment.
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(a) This account shall include amounts determined in accordance with
§32.2000(b) of this subpart representing the difference between (1) the fair
market value of the telecommunications plant acquired, plus preliminary
expenses incurred in connection with the acquisition; and (2) the original
cost of such plant, governmental franchises and similar rights acquired,
less the amounts of reserve requirements for depreciation and amortization
of the property acquired. If the actual original cost is not known, the
entries in this account shall be based upon an estimate of such costs.
(b) The amounts recorded in this account with respect to each property
acquisition (except land and artworks) shall be disposed of, written off, or
provision shall be made for the amortization thereof, as follows:
(1) Debit amounts may be charged in whole or in part, or amortized over a
reasonable period through charges to Account 7300, Nonoperating income and
expense, without further direction or approval by this Commission. When
specifically approved by this Commission, or when the provisions of
paragraph (b)(3) of this section apply, debit amounts shall be amortized to
Account 6565, Amortization expense—other.
(2) Credit amounts shall be disposed of in such manner as this Commission
may approve or direct, except for credit amounts referred to in paragraph
(b)(4) of this section.
(3) The amortization associated with the costs recorded in the
Telecommunications plant adjustment account will be charged or credited, as
appropriate, directly to this asset account, leaving a balance representing
the unamortized cost.
(4) Within one year from the date of inclusion in this account of a debit or
credit amount with respect to a current acquisition, the company may dispose
of the total amount from an acquisition of telephone plant by a lump-sum
charge or credit, as appropriate, to Account 6565 without further approval
of this Commission, provided that such amount does not exceed $100,000 and
that the plant was not acquired from an affiliated company.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5685 , Feb. 6, 2002; 69 FR 53648 , Sept. 2, 2004]
§ 32.2006 Nonoperating plant.
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(a) This account shall include the company's investment in regulated
property which is not includable in the plant accounts as operating
telecommunications plant. It shall include the company's investment in
telecommunications property held for sale. (Note also Account 1406,
Nonregulated Investments.)
(b) Subsidiary records shall be maintained to show the character of the
amounts carried in this account.
§ 32.2007 Goodwill.
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(a) This account shall include any portion of the plant purchase price that
cannot be assigned to specifically identifiable property acquired and such
amount should be identified as “goodwill”. Such amounts included in this
account shall be amortized to Account 7300, Nonoperating income and expense,
on a straight line basis over the remaining life of the acquired plant, not
to exceed 40 years.
(b) The amounts included in this account shall be maintained to show the
nature of each amount.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2110 Land and support assets.
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This account shall be used by Class B companies to record the original cost
of land and support assets of the type and character required of Class A
companies in Accounts 2111 through 2124.
§ 32.2111 Land.
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(a) This account shall include the original cost of all land held in fee and
of easements, and similar rights in land having a term of more than one year
used for purposes other than the location of outside plant (see Accounts
2411 through 2441) or externally mounted central office equipment (see
Accounts 2211 and 2212). It shall also include special assessments upon land
for the construction of public improvements.
(b) When land, together with buildings thereon, is acquired, the original
cost shall be fairly apportioned between the land and the buildings and
accounted for accordingly. If the plan of acquisition contemplates the
removal of buildings, the total cost of the land and buildings shall be
accounted for as the cost of the land, and the salvage value of the
buildings when disposed of shall be deducted from the cost of the land so
determined.
(c) Annual or more frequent payments for use of land shall be recorded in
the rent subsidiary record category for Account 6121, Land and Building
Expense.
(d) When land is acquired for which there is not a definite plan for its use
in telecommunications service, its costs shall be included in Account 2006,
Nonoperating Plant.
(e) When land is acquired in excess of that required for telecommunications
purposes, the cost of such excess land shall be included in Account 2006.
(f) Installments of assessments for public improvement, including interest,
if any, which are deferred without option to the company shall be included
in this account only as they become due and payable. Interest on assessments
which are not paid when due shall be included in Account 7500, Interest and
related items.
(g) When land is purchased for immediate use in a construction project, its
cost shall be included in Account 2003, Telecommunications plant under
construction, until such time as the project involved is completed and ready
for service.
(h) The original cost of leaseholds, easements, rights of way, and similar
rights in land having a term of more than one year and not includable in
Account 2111 shall be included in the accounts for outside plant or
externally mounted central office equipment in connection with which the
rights were acquired.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2112 Motor vehicles.
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This account shall include the original cost of motor vehicles of the type
which are designed and routinely licensed to operate on public streets and
highways.
§ 32.2113 Aircraft.
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This account shall include the original cost of aircraft and any associated
equipment and furnishings installed as an integral part of the aircraft.
§ 32.2114 Tools and other work equipment.
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This account shall include the original cost of special purpose vehicles and
the original cost of tools and equipment used to maintain special purpose
vehicles and items included in Accounts 2112 and 2113. This account shall
also include the original cost of power-operated equipment, general purpose
tools, and other items of work equipment.
[ 64 FR 50007 , Sept. 15, 1999]
§ 32.2121 Buildings.
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(a) This account shall include the original cost of buildings, and the cost
of all permanent fixtures, machinery, appurtenances and appliances installed
as a part thereof. It shall include costs incident to the construction or
purchase of a building and to securing possession and title.
(b) When land, together with the buildings thereon, is acquired, the
original cost shall be fairly apportioned between the land and buildings,
and the amount applicable to the buildings shall be included in this
account. The amount applicable to the land shall be included in Account
2111, Land.
(c) This account shall not include the cost of any telephone equipment or
wiring apparatus for generating or controlling electricity for operating the
telephone system.
§ 32.2122 Furniture.
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This account shall include the original cost of furniture in offices,
storerooms, shops, and all other quarters. This account shall also include
the cost of objects which possess aesthetic value, are of original or
limited edition, and do not have a determinable useful life. The cost of any
furniture attached to and constituting a part of a building shall be charged
to account 2121, Buildings.
§ 32.2123 Office equipment.
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This account shall include the original cost of office equipment in offices,
shops and all other quarters. The cost of any equipment attached to and
constituting a part of a building shall be charged to Account 2121,
Buildings.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2124 General purpose computers.
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(a) This account shall include the original cost of computers and peripheral
devices which are designed to perform general administrative information
processing activities.
(b) Administrative information processing includes but is not limited to
activities such as the preparation of financial, statistical, or other
business analytical reports; preparation of payroll, customer bills, and
cash management reports, and other records and reports not specifically
designed for testing, diagnosis, maintenance or control of the
telecommunications network facilities.
(c) [Reserved]
(d) This account does not include the cost of computers and their associated
peripheral devices associated with switching, network signaling, network
operations, or other specific telecommunications plant. Such computers and
peripherals shall be classified to the appropriate switching, network
signaling, network expense, or other plant account.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 64 FR 50007 , Sept. 15, 1999]
§ 32.2210 Central office—switching.
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This account shall be used by Class B companies to record the original cost
of switching assets of the type and character required of Class A companies
in Accounts 2211 through 2212.
[ 67 FR 5686 , Feb. 6, 2002]
§ 32.2211 Non-digital switching.
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(a) This account shall include:
(1) Original cost of stored program control analog circuit-switching and
associated equipment.
(2) Cost of remote analog electronic circuit switches.
(3) Original cost of non-electronic circuit-switching equipment such as
Step-by-Step, Crossbar, and Other Electro-Mechanical Switching.
(b) Switching plant excludes switchboards which perform an operator
assistance function and equipment which is an integral part thereof. It does
not exclude equipment used solely for the recording of calling telephone
numbers in connection with customer dialed charged traffic, dial tandem
switchboards and special service switchboards used in conjunction with
private line service; such equipment shall be classified to the particular
switch that if serves.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2212 Digital electronic switching.
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(a) This account shall include the original cost of stored program control
digital switches and their associated equipment. Included in this account
are digital switches which utilize either dedicated or non-dedicated
circuits. This account shall also include the cost of remote digital
electronic switches. The investment in digital electronic switching
equipment shall be maintained in the following subaccounts: 2212.1 Circuit
and 2212.2 Packet.
(b) This subaccount 2212.1 Circuit shall include the original cost of
digital electronic switching equipment used to provide circuit switching.
Circuit switching is a method of routing traffic through a switching center,
from local users or from other switching centers, whereby a connection is
established between the calling and called stations until the connection is
released by the called or calling station.
(c) This subaccount 2212.2 Packet shall include the original cost of digital
electronic switching equipment used to provide packet switching. Packet
switching is the process of routing and transferring information by means of
addressed packets so that a channel is occupied during the transmission of
the packet only, and upon completion of the transmission the channel is made
available for the transfer of other traffic.
(d) Digital electronic switching equipment used to provide both circuit and
packet switching shall be recorded in the subaccounts 2212.1 Circuit and
2212.2 Packet based upon its predominant use.
(e) Switching plant excludes switchboards which perform an operator
assistance function and equipment which is an integral part thereof. It does
not exclude equipment used solely for the recording of calling telephone
numbers in connection with customer dialed charged traffic, dial tandem
switchboards and special service switchboards used in conjunction with
private line service; such equipment shall be classified to the particular
switch that it serves.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2220 Operator systems.
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(a) This account shall include the original cost of those items of equipment
used to assist subscribers in utilizing the network and equipment used in
the provision of directory assistance, call intercept, and other operator
assisted call completion activities.
(b) This account does not include equipment used solely for the recording of
calling telephone numbers in connection with customer dialed charged
traffic, dial tandem switchboards and special service switchboards used in
conjunction with private line service; such equipment shall be classfied to
the particular switch that it serves.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 46930 , Sept. 13, 1994]
§ 32.2230 Central office—transmission.
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This account shall be used by Class B companies to record the original cost
of radio systems and circuit equipment of the type and character required of
Class A companies in Accounts 2231 and 2232.
§ 32.2231 Radio systems.
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(a) This account shall include the original cost of ownership of radio
transmitters and receivers. This account shall include the original cost of
ownership interest in satellites (including land-side spares), other spare
parts, material and supplies. It shall include launch insurance and other
satellite launch costs. This account shall also include the original cost of
earth stations and spare parts, material or supplies therefor.
(b) This account shall also include the original cost of radio equipment
used to provide radio communication channels. Radio equipment is that
equipment which is used for the generation, amplification, propagation,
reception, modulation, and demodulation of radio waves in free space over
which communication channels can be provided. This account shall also
include the associated carrier and auxiliary equipment and patch bay
equipment which is an integral part of the radio equipment. Such equipment
may be located in central office building, terminal room, or repeater
stations or may be mounted on towers, masts, or other supports.
[ 67 FR 5686 , Feb. 6, 2002]
§ 32.2232 Circuit equipment.
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(a) This account shall include the original cost of equipment which is used
to reduce the number of physical pairs otherwise required to serve a given
number of subscribers by utilizing carrier systems, concentration stages or
combinations of both. It shall include equipment that provides for
simultaneous use of a number of interoffice channels on a single
transmission path. This account shall also include equipment which is used
for the amplification, modulation, regeneration, circuit patching, balancing
or control of signals transmitted over interoffice communications
transmission channels. This account shall include equipment which utilizes
the message path to carry signaling information or which utilizes separate
channels between switching offices to transmit signaling information
independent of the subscribers' communication paths or transmission
channels. This account shall also include the original cost of associated
material used in the construction of such plant. Circuit equipment may be
located in central offices, in manholes, on poles, in cabinets or huts, or
at other company locations. The investment in circuit equipment shall be
maintained in the following subaccounts: 2232.1 Electronic and 2232.2
Optical.
(b) This subaccount 2232.1 Electronic shall include the original cost of
electronic circuit equipment.
(c) This subaccount 2232.2 Optical shall include the original cost of
optical circuit equipment.
(d) Circuit equipment that converts electronic signals to optical signals or
optical signals to electronic signals shall be categorized as electronic.
(e) This account excludes carrier and auxiliary equipment and patch bays
which are includable in Account 2231.2, Other Radio Facilities. This account
also excludes such equipment which is an integral component of a major unit
which is classifiable to other accounts.
(f) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that relate to
digital and analog. Such subsidiary record categories shall be reported as
required by part 43 of this Commission's Rules and Regulations.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5686 , Feb. 6, 2002]
§ 32.2310 Information origination/termination.
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This account shall be used by Class B companies to record the original cost
of information origination/termination equipment of the type and character
required of Class A companies in Accounts 2311 through 2362.
§ 32.2311 Station apparatus.
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(a) This account shall include the original cost of station apparatus,
including teletypewriter equipment, telephone and miscellaneous equipment,
small private branch exchanges and radio equipment (excluding mobile),
installed for customer's use. Items included in this account shall remain
herein until finally disposed of or until used in such manner as to warrant
inclusion in other accounts.
(b) Each company shall prepare a list of station apparatus which shall be
used as its list of disposition units for this account, the cost of which
when finally disposed of shall be credited to this account and charged to
Account 3100, Accumulated Depreciation.
(c) The cost of cross-connection boxes, distributing frames or other
distribution points which are installed to terminate intrabuilding network
cable shall be charged to Account 2426, Intrabuilding Network Cable.
(d) Operator head sets and transmitters in central offices and at private
branch exchanges, and test sets such as those used by wire chiefs, outside
plant technicians, and others, shall be included in Account 2114, Tools and
other work equipment, Account 2220, Operator systems, or Account 2341, Large
Private Branch Exchanges, as appropriate.
(e) Station apparatus for company official use shall be included in Account
2123, Office Equipment.
(f) Periodic asset verification, as prescribed by generally accepted
accounting principles, shall be taken of all station apparatus in stock that
are included in this account. The number of such station apparatus items as
determined by this verification together with the number of all other
station apparatus items included in this account, shall be compared with the
corresponding number of station apparatus items as shown by the respective
control records. The original cost of any unreconciled differences thereby
disclosed shall be adjusted through Account 3100, Accumulated Depreciation.
Appropriate verifications shall be made at suitable intervals and necessary
adjustments between this account and Account 3100 shall be made for all
station apparatus included in this account.
(g) Items of station apparatus in stock for which no further use in the
ordinary conduct of the business is contemplated, but which as a
precautionary measure are held for possible future contingencies instead of
being discarded shall be excluded from this account and included in Account
1220, Inventories.
(h) Embedded CPE is that equipment or inventory which was tariffed or
otherwise subject to the jurisdictional separations process as of January 1,
1983.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 6561 , Mar. 4, 1987; 52 FR 39535 , Oct. 22, 1987; 59 FR 46930 , Sept. 13, 1994; 64 FR 50007 , Sept. 15,
1999; 67 FR 5687 , Feb. 6, 2002]
§ 32.2321 Customer premises wiring.
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(a) This account shall include all amounts transferred from the former
Account 232, Station Connections, inside wiring subclass.
(b) Embedded Customer Premises Wiring is that investment in customer
premises wiring equipment or inventory which was capitalized prior to
October 1, 1984.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 6561 , Mar. 4, 1987]
§ 32.2341 Large private branch exchanges.
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(a) This account shall include the original cost, including the cost of
installation, of multiple manual private branch exchanges and of dial system
private branch exchanges of types designed to accommodate 100 or more lines
or which can normally be expanded to 100 or more lines, installed for
customers' use. This account shall also include the original cost of other
large installations of station equipment: (1) Which do not constitute
stations, (2) which require special or individualized treatment because of
their complexity, special design, or other distinctive characteristics, and
(3) for which individual or other specialized cost records are appropriate.
(Note also Account 2311, Station Apparatus.)
(b) The cost of intrabuilding network cables including their associated
cross-connection boxes, terminals, distributing frames, etc., is chargeable
to Account 2426, Intrabuilding Network Cable.
(c) The cost of outside plant, whether or not on private property, used with
intrabuilding, network cable shall be charged to the appropriate outside
plant accounts.
(d)–(e) [Reserved]
(f) Private branch exchanges for company official use shall be included in
Account 2123, Office Equipment.
(g) Embedded CPE is that equipment or inventory which is tariffed or
otherwise subject to the jurisdictional separations process as of January 1,
1983. Inventories of large private branch exchanges equipment are included
in Account 1220, Inventories.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 6562 , Mar. 4, 1987; 52 FR 39535 , Oct. 22, 1987; 59 FR 46930 , Sept. 13, 1994]
§ 32.2351 Public telephone terminal equipment.
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(a) This account shall include the original cost of coinless, coin-operated
(including public and semi-public), credit card and pay telephone installed
for use by the public.
(b) This account shall also include the original cost of operating spares
that are required to provide a continuity of service for public telephones.
The operating spares shall not exceed six months supply in terms of turnover
and be available to installers from locations in reasonable proximity to the
location of the installed equipment.
(c) The original cost of installing public telephone equipment shall not
include the labor and minor materials costs of installing the public
telephone equipment or premises wiring. These costs as well as the cost of
replacing a public telephone shall be charged to Account 6351 Public
Telephone Terminal Equipment Expense. The labor and minor materials costs of
removal of public telephones will also be charged to Account 6351.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 29019 , Aug. 5, 1987]
§ 32.2362 Other terminal equipment.
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(a) This account shall include the original cost of other Non-CPE terminal
equipment not specifically provided for elsewhere and items such as
specialized communications equipment provided to meet the needs of the
disabled, over-voltage protection equipment, multiplexing equipment to
deliver multiple channels to customers, etc.
(b) Each company shall prepare a list of other terminal equipment which
shall be used as its list of retirement units for this account, the cost of
which when finally disposed of shall be credited to this account and charged
to Account 3100, Accumulated Depreciation.
§ 32.2410 Cable and wire facilities.
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This account shall be used by Class B companies to record the original cost
of cable and wire facilities of the type and character required of Class A
companies in Accounts 2411 through 2441.
§ 32.2411 Poles.
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This account shall include the original cost of poles, crossarms, guys and
other material used in the construction of pole lines and shall include the
cost of towers when not associated with buildings. This account shall also
include the cost of clearing pole line routes and of tree trimming but shall
exclude the cost of maintaining previously cleared routes.
§ 32.2421 Aerial cable.
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(a) This account shall include the original cost of aerial cable and of drop
and block wires served by such cable or aerial wire as well as the cost of
other material used in construction of such plant. Subsidiary record
categories, as defined below, are to be maintained for nonmetallic aerial
cable and metallic aerial cable.
(1) Nonmetallic cable. This subsidiary record category shall include the
original cost of optical fiber cable and other associated material used in
constructing a physical path for the transmission of telecommunications
signals.
(2) Metallic cable. This subsidiary record category shall include the
original cost of single or paired conductor cable, wire and other associated
material used in constructing a physical path for the transmission of
telecommunications signals.
(b) The cost of permits and privileges for the construction of cable and
wire facilities shall be included in the account chargeable with such
construction.
§ 32.2422 Underground cable.
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(a) This account shall include the original cost of underground cable
installed in conduit and of other material used in the construction of such
plant. Subsidiary record categories, as defined below, are to be maintained
for nonmetallic underground cable and metallic underground cable.
(1) Nonmetallic cable. This subsidiary record category shall include the
original cost of optical fiber cable and other associated material used in
constructing a physical path for the transmission of telecommunications
signals.
(2) Metallic cable. This subsidiary record category shall include the
original cost of single or paired conductor cable, wire and other associated
material used in constructing a physical path for the transmission of
telecommunications signals.
(b) The cost of pumping water out of manholes and of cleaning manholes and
ducts in connection with construction work and the cost of permits and
privileges for the construction of cable and wire facilities shall be
included in the account chargeable with such construction.
(c) The cost of drop and block wires served by underground cable shall be
included in Account 2423, Buried Cable.
(d) The cost of cables leading from the main distributing frame or
equivalent to central office equipment shall be included in the appropriate
switching, transmission or other operations asset account.
§ 32.2423 Buried cable.
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(a) This account shall include the original cost of buried cable as well as
the cost of other material used in the construction of such plant. This
account shall also include the cost of trenching for and burying cable run
in conduit not classifiable to Account 2441, Conduit Systems. Subsidiary
record categories, as defined below, are to be maintained for nonmetallic
buried cable and metallic buried cable.
(1) Nonmetallic cable. This subsidiary record category shall include the
original cost of optical fiber cable and other associated material used in
constructing a physical path for the transmission of telecommunications
signals.
(2) Metallic cable. This subsidiary record category shall include the
original cost of single or paired conductor cable, wire and other associated
material used in constructing a physical path for the transmission of
telecommunications signals.
(b) The cost of pumping water out of manholes and of cleaning manholes and
ducts in connection with construction work and the cost of permits and
privileges for the construction of cable and wire facilities shall be
included in the account chargeable with such construction.
§ 32.2424 Submarine & deep sea cable.
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(a) This account shall include the original cost of submarine cable and deep
sea cable and other material used in the construction of such plant.
Subsidiary record categories, as defined below, are to be maintained for
nonmetallic submarine and deep sea cable and metallic submarine and deep sea
cable.
(1) Nonmetallic cable. This subsidiary record category shall include the
original cost of optical fiber cable and other associated material used in
constructing a physical path for the transmission of telecommunications
signals.
(2) Metallic cable. This subsidiary record category shall include the
original cost of single or paired conductor cable, wire and other associated
material used in constructing a physical path for the transmission of
telecommunications signals.
(b) The cost of permits and privileges for the construction of cable and
wire facilities shall be included in the account chargeable with such
construction.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5687 , Feb. 6, 2002]
§ 32.2426 Intrabuilding network cable.
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(a) This account shall include the original cost of cables and wires located
on the company's side of the demarcation point or standard network interface
inside subscribers' buildings or between buildings on one customer's same
premises. Intrabuilding network cables are used to distribute network access
facilities to equipment rooms, cross-connection or other distribution points
at which connection is made with customer premises wiring. Subsidiary record
categories, as defined below, are to be maintained for nonmetallic
intrabuilding network cable and metallic intrabuilding network cable.
(1) Nonmetallic cable. This subsidiary record category shall include the
original cost of optical fiber cable and other associated material used in
constructing a physical path for the transmission of telecommunications
signals.
(2) Metallic cable. This subsidiary record category shall include the
original cost of single or paired conductor cable, wire and other associated
material used in constructing a physical path for the transmission of
telecommunications signals.
(b) The cost of pumping water out of manholes and of cleaning manholes and
ducts in connection with construction work and the cost of permits and
privileges for the construction of cable and wire facilities shall be
included in the account chargeable with such construction.
(c) Intrabuilding network cable does not include the cost of cables or wires
which are classifiable as network terminating wire, nor the cables or wires
from the demarcation point or standard network interface to subscribers'
stations.
§ 32.2431 Aerial wire.
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(a) This account shall include the original cost of bare line wire and other
material used in the construction of such plant.
(b) The cost of permits and privileges for the construction of cable and
wire facilities shall be included in the account chargeable with such
construction.
(c) The cost of drop and block wires served by aerial wire shall be included
in Account 2421, Aerial Cable.
§ 32.2441 Conduit systems.
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(a) This account shall include the original cost of conduit, whether
underground, in tunnels or on bridges, which is reusable in place. It shall
also include the cost of opening trenches and of any repaving necessary in
the construction of conduit plant.
(b) The cost of pumping water out of manholes and of cleaning manholes and
ducts in connection with construction work and the cost of permits and
privileges for the construction of cable and wire facilities shall be
included in the account chargeable with such construction.
(c) The cost of protective covering for buried cable shall be charged to
Account 2423, Buried Cable, as appropriate, unless such protective covering
is reusable in place. The amounts thus charged shall be included in the
nonmetallic buried cable or metallic buried cable subsidiary record
category, as appropriate.
(d) The cost of pipes or other protective covering for underground drop and
block wires shall be included in Account 2421, Aerial Cable, or Account
2423, Buried Cable, as appropriate. The amounts thus charged shall be
included in the nonmetallic or metallic subsidiary record category, as
appropriate.
§ 32.2680 Amortizable tangible assets.
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This account shall be used by Class B carriers to record amounts for
property acquired under capital leases and the original cost of leasehold
improvements of the type of character required of Class A companies in
Accounts 2681 and 2682.
§ 32.2681 Capital leases.
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(a) This account shall include all property acquired under a capital lease.
A lease qualifies as a capital lease when one or more of the following
criteria is met:
(1) By the end of the lease term, ownership of the leased property is
transferred to the leasee.
(2) The lease contains a bargain purchase option.
(3) The lease term is substantially (75% or more) equal to the estimated
useful life of the leased property. However, if the beginning of the lease
term falls within the last 25% of the total estimated economic life of the
leased property, including earlier years of use, this criterion shall not be
used for purposes of classifying the lease.
(4) At the inception of the lease, the present value of the minimum lease
payments, excluding that portion of the payments representing executory
costs to be paid by the lessor, including any profit thereon, equals or
exceeds 90% or more of the fair value of the leased property. However, if
the beginning of the lease term falls within the last 25% of the total
estimated economic life of the leased property, including earlier years of
use, this criterion shall not be used for purposes of classifying the lease.
(b) All other leases are operating leases.
(c) The amounts recorded in this account at the inception of a capital lease
shall be equal to the original cost, if known, or to the present value not
to exceed fair value, at the beginning of the lease term, of minimum lease
payments during the lease term, excluding that portion of the payments
representing executory costs to be paid by the lessor, together with any
profit thereon.
§ 32.2682 Leasehold improvements.
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(a) This account shall include the original cost of leasehold improvements
made to telecommunications plant held under a capital or operating lease,
which are subject to amortization treatment. This account shall also include
those improvements which will revert to the lessor.
(b) Improvements to leased telecommunications plant which are of a
relatively minor cost or short life or for which the period of the lease is
one year or less shall be charged to the account chargeable with the cost of
repairs to such plant.
(c) Amounts contained in this account shall be amortized over the term of
the related lease. For Class A companies, except mid-sized incumbent local
exchange carriers, the amortization associated with the costs recorded in
the Leasehold improvement account will be credited directly to this asset
account, leaving a balance representing the unamortized cost.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5687 , Feb. 6, 2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.2690 Intangibles.
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(a) This account shall include the cost of organizing and incorporating the
company, the original cost of government franchises, the original cost of
patent rights, and other intangible property having a life of more than one
year and used in connection with the company's telecommunications
operations.
(b) Class A companies, except mid-sized incumbent local exchange carriers,
shall maintain subsidiary records for general purpose computer software and
for network software. Subsidiary records for this account shall also include
a description of each class of all other tangible property.
(c) The cost of other intangible assets, not including software, having a
life of one year or less shall be charged directly to Account 6564,
Amortization expense—intangible. Such intangibles acquired at small cost may
also be charged to Account 6564, irrespective of their term of life. The
cost of software having a life of one year or less shall be charged directly
to the applicable expense account with which the software is associated.
(d) The amortization associated with the costs recorded in the Intangibles
account will be credited directly to this asset account, leaving a balance
representing the unamortized cost.
(e) This account shall not include any discounts on securities issued, nor
shall it include costs incident to negotiating loans, selling bonds or other
evidences of debt, or expenses in connection with the authorization,
issuance, sale or resale of capital stock.
(f) When charges are made to this account for expenses incurred in mergers,
consolidations, or reorganizations, amounts previously included in this
account on the books of the various companies concerned shall not be carried
over.
(g) Franchise taxes payable annually or more frequently shall be charged to
Account 7240, Operating other taxes.
(h) This account shall not include the cost of plant, material and supplies,
or equipment furnished to municipalities or other governmental authorities
when given other than as initial consideration for franchises or similar
rights. (Note also Account 6720, General & administrative).
(i) This account shall not include the original cost of easements, rights of
way, and similar rights in land having a term of more than one year. Such
amounts shall be recorded in Account 2111, Land, or in the appropriate
outside plant account (see Accounts 2411 through 2441), or in the
appropriate central office account (see Accounts 2211 through 2232).
[ 67 FR 5687 , Feb. 6, 2002, as amended at 69 FR 53649 , Sept. 2, 2004]
§ 32.3000 Instructions for balance sheet accounts—Depreciation and
amortization.
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(a) Depreciation and Amortization Subsidiary Records:
(1) Subsidiary record categories shall be maintained for each class of
depreciable telecommunications plant in Account 3100 for which there is a
prescribed depreciation rate. (See also §32.2000(g)(1)(iii) of this
subpart.)
(2) Subsidiary records shall be maintained for Accounts 2005, 2682, 2690,
and 3410 in accordance with §32.2000(h)(4).
(b) Depreciation and Amortization Accounts to be Maintained by Class A and
Class B telephone companies, as indicated.
Account title Class A
account Class B
account
Depreciation and amortization:
Accumulated depreciation 3100 3100
Accumulated depreciation—Held for future telecommunications use 3200 3200
Accumulated depreciation—Nonoperating 3300 3300
Accumulated depreciation—Tangible 3400
Accumulated depreciation—Capitalized leases 3410
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 46930 , Sept. 13, 1994; 67 FR 5687 , Feb. 6, 2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.3100 Accumulated depreciation.
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(a) This account shall include the accumulated depreciation associated with
the investment contained in Account 2001, Telecommunications Plant in
Service.
(b) This account shall be credited with depreciation amounts concurrently
charged to Account 6561, Depreciation expense—telecommunications plant in
service. (Note also Account 3300, Accumulated depreciation—nonoperating.)
(c) At the time of retirement of depreciable operating telecommunications
plant, this account shall be charged with the original cost of the property
retired plus the cost of removal and credited with the salvage value and any
insurance proceeds recovered.
(d) This account shall be credited with amounts charged to Account 1438,
Deferred maintenance, retirements, and other deferred charges, as provided
in §32.2000(g)(4) of this subpart. This account shall be credited with
amounts charged to Account 6561 with respect to other than relatively minor
losses in service values suffered through terminations of service when
charges for such terminations are made to recover the losses.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5687 , Feb. 6, 2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.3200 Accumulated depreciation—held for future telecommunications use.
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(a) This account shall include the accumulated depreciation associated with
the investment contained in Account 2002, Property Held for Future
Telecommunications Use.
(b) This account shall be credited with amounts concurrently charged to
Account 6562, Depreciation expense—property held for future
telecommunications use.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5688 , Feb. 6, 2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.3300 Accumulated depreciation—nonoperating.
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(a) This account shall include the accumulated amortization and depreciation
associated with the investment contained in Account 2006, Nonoperating
Plant.
(b) This account shall be credited with amortization and depreciation
amounts concurrently charged to Account 7300, Nonoperating income and
expense.
(c) When nonoperating plant not previously used in telecommunications
service is disposed of, this account shall be charged with the amount
previously credited hereto with respect to such property and the book cost
of the property so retired less the amount chargeable to this account and
less the value of the salvage recovered or the proceeds from the sale of the
property shall be included in Account 7300, Nonoperating income and expense.
In case the property had been used in telecommunications service previous to
its inclusion in Account 2006, Nonoperating Plant, the amount accrued for
depreciation thereon after its retirement from telecommunications service
shall be charged to this account and credited to Account 3100, Accumulated
depreciation, and the accounting for its retirement from Account 2006 shall
be in accordance with that applicable to telecommunications plant retired.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 46930 , Sept. 13, 1994; 67 FR 5688 , Feb. 6, 2002]
§ 32.3400 Accumulated amortization—tangible.
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(a) This account shall be used by Class B companies and shall include:
(1) the accumulated amortization associated with the investment contained in
Account 2681, Capital leases.
(2) the accumulated amortization associated with the investment contained in
Account 2682, Leasehold improvements.
(b) This account shall be credited with amounts for the amortization of
capital leases and leasehold improvements concurrently charged to Account
6563, Amortization expense—tangible. (Note also Account 3300, Accumulated
depreciation—nonoperating.)
(c) When any item carried in Account 2681 or Account 2682 is sold, is
relinquished, or is otherwise retired from service, this account shall be
charged with the cost of the retired item. Remaining amounts associated with
the item shall be debited to Account 7100, Other operating income and
expenses, or Account 7300, Nonoperating income and expense, as appropriate.
[ 69 FR 53649 , Sept. 2, 2004]
§ 32.3410 Accumulated amortization—capitalized leases.
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(a) This account shall include the accumulated amortization associated with
the investment contained in Account 2681, Capital Leases.
(b) This account shall be credited with amounts for the amortization of
capital leases concurrently charged to Account 6563, Amortization
expense—tangible. (Note also Account 3300, Accumulated
depreciation—nonoperating.)
(c) When any item carried in Account 2681 is sold, is relinquished, or is
otherwise retired from service, this account shall be charged with the cost
of the retired item. Remaining amounts associated with the item shall be
debited to Account 7100, Other operating income and expenses, or Account
7300, Nonoperating income and expense, as appropriate.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5688 , Feb. 6, 2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.3999 Instructions for balance sheet accounts—liabilities and
stockholders' equity.
top
Liabilities and Stockholders' Equity Accounts To Be Maintained by Class A
and Class B Telephone Companies
Account title Class A
account Class B
account
Current liabilities:
Current accounts and notes payable 4000 4000
Customer's Deposits 4040 4040
Income taxes—accrued 4070 4070
Other taxes—accrued 4080 4080
Net Current Deferred Nonoperating Income Taxes 4100 4100
Net Current Deferred Nonoperating Income Taxes 4110 4110
Other current liabilities 4130 4130
Long-term debt:
Long Term debt and Funded debt 4200 4200
Other liabilities and deferred credits:
Other liabilities and deferred credits 4300 4300
Unamortized operating investment tax credits—net 4320 4320
Unamortized nonoperating investment tax credits—net 4330 4330
Net noncurrent deferred operating income taxes 4340 4340
Net deferred tax liability adjustments 4341 4341
Net noncurrent deferred nonoperating income taxes 4350 4350
Deferred tax regulatory adjustments—net 4361 4361
Other jurisdictional liabilities and deferred credits—net 4370 4370
Stockholder's equity:
Capital stock 4510 4510
Additional paid-in capital 4520 4520
Treasury stock 4530 4530
Other capital 4540 4540
Retained earnings 4550 4550
[ 67 FR 5688 , Feb. 6, 2002]
§ 32.4000 Current accounts and notes payable.
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(a) This account shall include:(1) All amounts currently due to others for
recurring trade obligations, and not provided for in other accounts, such as
those for traffic settlements, material and supplies, repairs to
telecommunications plant, matured rents, and interest payable under monthly
settlements on short-term loans, advances, and open accounts. It shall also
include amounts of taxes payable that have been withheld from employees'
salaries.
(2) Accounts payable arising from sharing of revenues.
(3) The face amount of notes, drafts, and other evidences of indebtedness
issued or assumed by the company (except interest coupons) which are payable
on demand or not more than one year or less from date of issue.
(b) If any part of an obligation, otherwise includable in this account
matures more than one year from date of issue, it shall be included in
Account 4200, Long term debt and funded debt, or other appropriate account.
(c) The records supporting the entries to this account shall be kept so that
the company can furnish complete details as to each note, when it is issued,
the consideration received, and when it is payable.
(d) Subsidiary record categories shall be maintained for this account in
order that the company may separately report the amounts contained herein
that relate to nonaffiliates and affiliates. Such subsidiary record
categories shall be reported as required by part 43 of this chapter.
[ 67 FR 5688 , Feb. 6, 2002]
§ 32.4040 Customers' deposits.
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(a) This account shall include the amount of cash deposited with the company
by customers as security for the payment for telecommunications service.
(b) Advance payments made by prospective customers prior to the
establishment of service shall be credited to Account 4130, Other current
liabilities.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5689 , Feb. 6, 2002]
§ 32.4070 Income taxes—accrued.
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(a) This account shall be credited or charged and the following accounts
shall be charged or credited with the offsetting amount of current year
income taxes (Federal, state and local) accrued during the period or
adjustments to prior accruals: 7220 Operating Federal Income Taxes, 7230
Operating State and Local Income Taxes, 7400 Nonoperating Taxes, 7600
Extraordinary Items.
(b) If significant, current year income taxes paid in advance shall be
reclassified to Account 1280, Prepayments.
[ 67 FR 5689 , Feb. 6, 2002]
§ 32.4080 Other taxes—accrued.
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(a) This account shall be credited or charged and Account 7240, Operating
Other Taxes, or 7400, Nonoperating Taxes, or, for payroll related costs, the
appropriate expense accounts shall be charged or credited for all taxes,
other than Federal, State and local income taxes, accrued or adjusted for
previous accruals during the period. Among the taxes includable in this
account are property, gross receipts, franchise, capital stock, social
security and unemployment taxes.
(b) Taxes paid in advance of the period in which they are chargeable to
income shall be included in the prepaid taxes Account 1280, Prepayments, or
1410, Other Noncurrent Assets, as appropriate.
[ 67 FR 5689 , Feb. 6, 2002]
§ 32.4100 Net current deferred operating income taxes.
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(a) This account shall include the balance of income tax expense related to
current items from regulated operations which have been deferred to later
periods as a result of the normalized method of accounting for tax
differentials authorized by this Commission and not provided for elsewhere.
(b) As regulated assets or liabilities which generated the deferred income
tax are reclassified from long-term or noncurrent status to current, the
appropriate deferred income tax shall be reclassified from Account 4340, Net
Noncurrent Deferred Operating Income Taxes, to this account.
(c) This account shall be debited or credited with the amount being debited
or credited to Account 7250, Provision For Deferred Operating Income
Taxes—Net, in accordance with that account's description and §32.22 of
subpart B.
(d) The classification of deferred income taxes as current or noncurrent
shall follow the classification of the asset or liability that gave rise to
the deferred income tax. If there is no related asset or liability,
classification shall be based on the expected turnaround of the temporary
differences.
(e) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that are property
related and those that are nonproperty related. Such subsidiary record
categories shall be reported as required by Part 43 of this Commission's
Rules and Regulations.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9419 , Feb. 28, 1994]
§ 32.4110 Net current deferred nonoperating income taxes.
top
(a) This account shall include the balance of income tax expense resulting
from comprehensive interpreted tax allocation which has been deferred to
later periods.
(b) As other assets or liabilities which generated the deferred income tax
are reclassified from long-term or noncurrent status to current, the
appropriate deferred income tax shall be reclassified from Account 4350, Net
Noncurrent Deferred Nonoperating Income Taxes, to this account.
(c) This account shall be debited or credited with the amount being credited
or debited to Account 7400, Nonoperating taxes, in accordance with that
account's description and §32.22.
(d) This account shall also include the balance of the income taxes
(Federal, state and local) related to current extraordinary items which have
been deferred to later periods resulting from comprehensive interperiod tax
allocation.
(e) As the extraordinary item which generated the deferred income tax
becomes current, the appropriate deferred income tax shall be reclassified
from Account 4350, Net Noncurrent Deferred Nonoperating Income Taxes, to
this account.
(f) This account shall be debited or credited with the amount being credited
and debited to Account 7600, Extraordinary Items.
(g) The classification of deferred income taxes as current or noncurrent
shall follow the classification of the asset or liability that gave rise to
deferred income tax. If there is no related asset or liability,
classification shall be based on the expected turnaround of the temporary
differences.
(h) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that are property
related and those that are nonproperty related. Such subsidiary record
categories shall be reported as required by part 43 of this Commission's
Rules and Regulations.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9419 , Feb. 28, 1994; 67 FR 5689 , Feb. 6, 2002]
§ 32.4130 Other current liabilities.
top
This account shall include:
(a) The amount of advance billing creditable to revenue accounts in future
months; also advance payments made by prospective customers prior to the
establishment of service. Amounts included in this account shall be credited
to the appropriate revenue accounts in the months in which the service is
rendered or cleared from this account as refunds are made.
(b) The amount (including any obligations for premiums) of long-term debt
matured and unpaid without any specific agreement for extension of maturity,
including unpresented bonds drawn for redemption through the operation of
sinking and redemption fund agreements.
(c) The current portion of obligations applicable to property obtained under
capital leases.
(d) The amount of wages, compensated absences, interest on indebtedness of
the company, dividends on capital stock, and rents accrued to the date for
which the balance sheet is made, but not payable until after that date.
Accruals shall be maintained so as to show separately the amount and nature
of the items accrued to the date of the balance sheet.
(e) Matured rents, dividends, interest payable under monthly settlements on
short-term loans, advances, and open accounts shall be included in Account
4000.
(f) All other liabilities of current character which are not included in
Account 4000 through 4110.
[ 67 FR 5689 , Feb. 6, 2002]
§ 32.4200 Long term debt and funded debt.
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(a) This account shall include:
(1) The total face amount of unmatured debt maturing more than one year from
date of issue, issued by the company and not retired, and the total face
amount of similar unmatured debt of other companies, the payment of which
has been assumed by the company, including funded debt the maturity of which
has been extended by specific agreement. This account shall also include
such items as mortgage bonds, collateral trust bonds, income bonds,
convertible debt, debt securities with detachable warrants and other similar
obligations maturing more than one year from date of issue.
(2) The premium associated with all classes of long-term debt. Premium, as
applied to securities issued or assumed by the company, means the excess of
the current money value received at their sale over the sum of their book or
face amount and interest or dividends accrued at the date of the sale.
(3) The discount associated with all classes of long-term debt. Discount, as
applied to securities issued or assumed by the company, means the excess of
the book or face amount of the securities plus interest or dividends accrued
at the date of the sale over the current money value of the consideration
received at their sale.
(4) The face amount of debt reacquired prior to maturity that has not been
retired. Gain or loss shall be recognized at the time of reacquisition by
credits or charges to Account 7300, Nonoperating income and expense, except
that material gains or losses shall be treated as extraordinary. (See
Account 7600, Extraordinary items.)
(5) The noncurrent portion of obligations applicable to property obtained
under capital leases. Amounts subject to current settlement shall be
included in Account 4130, Other current liabilities.
(6) The amount of advance from affiliated companies. Amounts due affiliated
companies which are subject to current settlement shall be included in
Account 4000.
(7) Investment advances, including those represented by notes.
(8) Long-term debt not provided for elsewhere.
(b) Subsidiary records shall be maintained for each issue. The subsidiary
records shall identify the premium or discount attributable to each issue.
(c) Premiums and discounts on long-term debt recorded in this account shall
be amortized monthly by the interest method and charged or credited, as
appropriate, to Account 7500, Interest and related items.
(d) Debt securities with detachable warrants shall be accounted for in
accordance with generally accepted accounting principles.
(e) Securities maturing in one year or less, including securities maturing
serially, shall be included in Account 4130, Other current liabilities.
[ 67 FR 5689 , Feb. 6, 2002]
§ 32.4300 Other long-term liabilities and deferred credits.
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(a) This account shall include amounts accrued to provide for such items as
unfunded pensions (if actuarially determined), death benefits, deferred
compensation costs and other long-term liabilities not provided for
elsewhere. Subsidiary records shall be maintained to identify the nature of
these items.
(b) This account shall include the amount of all deferred credits not
provided for elsewhere, such as amounts awaiting adjustment between
accounts; and revenue, expense, and income items in suspense.
[ 67 FR 5690 , Feb. 6, 2002]
§ 32.4320 Unamortized operating investment tax credits—net.
top
(a) This account shall be credited and Account 7210, Operating Investment
Tax Credits—Net, should be debited with investment tax credits generated
from qualified expenditures related to regulated operations which the
company defers rather than recognizes currently in income.
(b) This account shall be debited and Account 7210 credited with a
proportionate amount determined in relation to the period of time used for
computing book depreciation on the property to which the tax credit relates.
§ 32.4330 Unamortized nonoperating investment tax credits—net.
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(a) This account shall be credited and Account 7400, Nonoperating Taxes,
shall be debited with investment tax credits generated from qualified
expenditures related to other operations which the company has elected to
defer rather than recognize currently in income.
(b) This account shall be debited and Account 7400 credited with a
proportionate amount determined in relation to the useful book life of the
property to which the tax credit relates.
[ 67 FR 5690 , Feb. 6, 2002]
§ 32.4340 Net noncurrent deferred operating income taxes.
top
(a) This account shall include the balance of income tax expense related to
noncurrent items from regulated operations which have been deferred to later
periods as a result of comprehensive interperiod tax allocation related to
temporary differences that arise from regulated operations.
(b) This account shall be credited or debited, as appropriate, and Account
7250, Provision for Deferred Operating Income Taxes—Net, shall reflect the
offset for the tax effect of revenues and expenses from regulated operations
which have been included in the determination of taxable income, but which
will not be included in the determination of book income or for the tax
effect of revenues and expenses from regulated operations which have been
included in the determination of book income prior to the inclusion in the
determination of taxable income.
(c) As regulated assets or liabilities which generated the prepaid income
tax or deferred income tax are reclassified from long-term or noncurrent
status to current status, the appropriate deferred income tax shall be
reclassified from this account to Account 4100, Net Current Deferred
Operating Income Taxes.
(d) The classification of deferred income taxes as current or noncurrent
shall follow the classification of the asset or liability that gave rise to
the deferred income tax. If there is no related asset or liability,
classification shall be based on the expected turnaround of the temporary
difference.
(e) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that are property
related and those that are nonproperty related. Such subsidiary record
categories shall be reported as required by Part 43 of this Commission's
Rules and Regulations.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9419 , Feb. 28, 1994]
§ 32.4341 Net deferred tax liability adjustments.
top
(a) This account shall include the portion of deferred income tax charges
and credits pertaining to Account 32.4361, Deferred tax regulatory
adjustments—net.
(b) This account shall be used to record adjustments to the accumulated
deferred tax liabilities recorded in Accounts 4100 and 4340 for:
(1) Tax effects of temporary differences accounted for under the
flow-through method or treated as permanent differences.
(2) Reclassification attributable to changes in tax rates (Federal, state
and local). As tax rates increase or decrease, the offsetting debit or
credit will be recorded in Account 4361 as required by paragraph (a) of this
section.
(3) The tax effects of carryforward net operating losses and carryforward
investment tax credits expected to reduce future taxes payable that are
reported in published financial statements.
(4) Reversals of the tax effects of carryforward net operating losses and
carryforward investment tax credits previously recorded in this account at
the time they become recognized as reductions in current taxable income and
current taxes payable on tax returns.
(c) This account shall be exempt from the vintage year detail record
requirements of §32.22(e)(2).
[ 59 FR 9419 , Feb. 28, 1994, as amended at 67 FR 5690 , Feb. 6, 2002]
§ 32.4350 Net noncurrent deferred nonoperating income taxes.
top
(a) This account shall include the balance of income tax expense (Federal,
state, and local) that has been deferred to later periods as a result of
comprehensive interperiod allocation related to nonoperating differences.
(b) This account shall be credited or debited, as appropriate, and Account
7400, Nonoperating Taxes, shall reflect the offset for the tax effect of
revenues from other operations and extraordinary items and nonoperating
expenses which have been included in the determination of taxable income,
but which will not be included in the determination of book income or for
the tax effect of nonoperating expenses and extraordinary items and
nonoperating income which have been included in the determination of book
income prior to the inclusion in the determination of taxable income.
(c) As other assets or liabilities which generated the prepaid income tax or
deferred income tax are reclassified from long-term or non-current status to
current status, the appropriate deferred income tax shall be reclassified
from this account to account 4110, Net Current Deferred Nonoperating Income
Taxes.
(d) This account shall also include the balance of the income tax effect
(Federal, State and local) related to noncurrent extraordinary items which
have been included in the determination of taxable income in a period
different from when it is included in the determination of book income, that
is, more than one year.
(e) This account shall be charged or credited with the contra amount
recorded to Account 7600, Extraordinary items, in accordance with §32.22.
(f) As the extraordinary item which generated the deferred income tax
becomes current, the appropriate deferred income tax shall be reclassified
from this account to Account 4110, Net Current Deferred Nonoperating Income
Taxes.
(g) The classification of deferred income taxes as current or noncurrent
shall follow the classification of the asset or liability that gave rise to
the deferred income tax. If there is no related asset or liability,
classification shall be based on the expected turnaround of the temporary
difference.
(h) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that are property
related and those that are nonproperty related. Such subsidiary record
categories shall be reported as required by part 43 of this Commission's
Rules and Regulations.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9419 , Feb. 28, 1994; 67 FR 5690 , Feb. 6, 2002]
§ 32.4361 Deferred tax regulatory adjustments—net.
top
(a) This account shall include amounts of probable future revenue for the
recovery of future increases in taxes payable and amounts of probable future
revenue reductions attributable to future decreases in taxes payable. As
reductions or reversals occur, amounts recorded in this account shall be
reduced or increased, with a contra entry being made to Account 4341, Net
deferred tax liability adjustments.
(b) This account shall also be adjusted for the impact of prospective tax
rate changes on the deferred tax liability for those temporary differences
underlying its existing balance.
[ 67 FR 5690 , Feb. 6, 2002]
§ 32.4370 Other jurisdictional liabilities and deferred credits—net.
top
This account shall include the cumulative impact on liabilities and deferred
credits of the jurisdictional ratemaking practices which vary from those of
this Commission. All entries recorded in this account shall be recorded net
of any applicable income tax effects and shall be supported by appropriate
subsidiary records where necessary as provided for in §32.13 of subpart B.
§ 32.4510 Capital stock.
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(a) This account shall include the par value, stated amount, or in the case
of no-par stock, the amount received for capital stock issued and
outstanding.
(b) Subsidiary records shall be maintained so as to show separately each
class of stock.
(c) This account shall be charged with the book amount of any stock retired.
§ 32.4520 Additional paid-in capital.
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(a) This account shall include the difference between the net proceeds
(including discount, premium and stock issuance expense) received from the
issuance of capital stock and the amount includable in Account 4510, Capital
Stock, unless such difference results in a debit balance for that class of
stock, in which case the amount shall be charged to Account 4550, Retained
Earnings.
(b) This account shall also include gains arising from the retirement and
cancellation of capital stock. Losses from the retirement and cancellation
of capital stock shall be charged to this account to the extent that there
exist credits in this account for the same class of stock; otherwise to
Account 4550.
§ 32.4530 Treasury stock.
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This account shall include the cost of the company's own capital stock which
has been issued and subsequently reacquired but not retired or resold.
§ 32.4540 Other capital.
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This account shall include amounts which are credits arising from the
donation by stockholders of the company's capital stock, capital recorded
upon the reorganization or recapitalization of the company and temporary
declines in the value of marketable securities held for investment purposes.
(See also Account 1410, Other noncurrent assets).
[ 67 FR 5690 , Feb. 6, 2002]
§ 32.4550 Retained earnings.
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(a) This account shall include the undistributed balance of retained
earnings derived from the operations of the company and from all other
transactions not includable in the other accounts appropriate for inclusion
of stockholders' equity.
(b) Subsidiary records shall be maintained wherein are recorded all entries
to retained earnings during the year such that the detail of the entries may
be disclosed to the Commission.
Subpart D—Instructions For Revenue Accounts
top
§ 32.4999 General.
top
(a) Purpose of revenue accounts. The revenue accounts are intended to
include the actual cash inflows (or equivalents) that have or will occur as
a result of the company's ongoing major or central operations during the
period. They will include the revenues which arise from furnishing regulated
telecommunications services to others, from directory advertising, rentals
of telecommunications assets and from providing other services which are
directly associated with the provision of regulated telecommunications
services.
(b) Deductions from revenue. Corrections of overcharges, authorized refunds
of overcollections previously credited to revenue, authorized refunds and
adjustments on account of failure in service, and other corrections shall be
charged to the revenue account previously credited with the amounts
involved.
(c) Commissions. Commissions paid to others or employees in place of
compensation or salaries for services rendered, such as public telephone
commissions, shall be charged to Account 6623, Customer services, and not to
the revenue accounts. Other commissions shall be charged to the appropriate
expense accounts.
(d) Revenue recognition. Credits shall be made to the appropriate revenue
accounts when such revenue is actually earned. When the billing cycle
encompasses more than one accounting period, adjustments are necessary to
properly recognize the revenue applicable to the current accounting period
under report. Revenues recorded under the terms of two-tier contracts or
other variable payment plans should be deferred, if necessary, and
recognized ratably with expenses over the terms of the related contract. Any
amounts deferred shall be credited to Account 4300, Other long-term
liabilities and deferred credits.
(e) Contractual arrangements. Charges and credits resulting from activities
associated with the provisions of regulated telecommunications services
shall be recorded in a manner consistent with the nature of the underlying
contractual arrangements. The charges and credits resulting from expense
sharing or apportionment arrangements associated with the provision of
regulated telecommunications services shall be recorded in the detailed
regulated accounts. Charges and credits resulting from revenue settlement
agreements or other revenue pooling arrangements associated with the
provision of regulated telecommunications services shall be included in the
appropriate revenue accounts. Those charges and credits resulting from
contractual revenue pooling and/or sharing agreements shall be recorded in
each prescribed revenue account and prescribed subsidiary record categories
thereof to the extent that each is separately identifiable in the settlement
process. It is not intended that settlement amounts be allocated or
generally spread to the individual revenue accounts where they are not
separately identifiable in the settlement process. When the settlement
amounts are not identifiable by a revenue account they shall be recorded in
Account 5060, Other basic area revenue, 5105, Long distance message revenue,
or 5200, Miscellaneous revenue, as appropriate.
(f) Subsidiary records—jurisdictional subdivisions and interconnection.
Subsidiary record categories shall be maintained in order that the company
may separately report revenues derived from charges imposed under
intrastate, interstate and international tariff filings. Class A carriers
shall also maintain subsidiary record categories in order that the companies
may separately report interconnection revenues derived from the following
categories: Unbundled network element revenues, Resale revenues, Reciprocal
compensation revenues, and Other interconnection revenues. Such subsidiary
record categories shall be reported as required by part 43 of this
Commission's Rules and Regulations.
(g) Structure of revenue accounts. (1) The revenue section of the system of
accounts shall be organized by revenue group summary account, account and
subsidiary record category (if required).
(2) The revenue section of this system of accounts shall be comprised of six
major groups—Local Network Services Revenues, Network Access Services
Revenues, Long Distance Network Services Revenues, Miscellaneous Revenues,
Nonregulated revenues, and Uncollectible Revenues, which shall be considered
as a revenue group for the purposes of the construction of the system.
(3) Accounts shall be maintained as prescribed in this Section subject to
the conditions described in section 32.13 of subpart B. In certain
instances, subsidiary record categories may be required below the account
level by this system of accounts or by Commission order.
(h) Local Network Services revenues. Local Network Services revenues
(Accounts 5001 through 5060) shall include revenues derived from the
provision of service and equipment entirely within the basic service area.
That area is defined as the normal boundaries for local calling plus
Extended Area Service (EAS) boundaries as they apply to that service. It
includes revenues derived from both local private network service and local
public network services as well as from customer premises facilities
services. Local revenues include associated charges such as one-time service
connection or termination charges and secondary features such as call
waiting.
(i) Network Access revenues. (1) Network Access revenues (Accounts
5081–5083) shall include revenues derived from the provision of exchange
access services to an interexchange carrier or to an end user of
telecommunications services beyond the exchange carrier's network.
(2) Billing and collections service provided under exchange access tariffs
shall be included in the Miscellaneous Revenues Group.
(j) Long Distance Network Service revenues. Long Distance Network Service
revenues shall include revenues derived from the provision of services
beyond the basic service area, whether message or flat-rate and including
public network switching as well as private.
(k) Miscellaneous revenues. Miscellaneous revenues are those revenues
derived from the provision of regulated products and services provided under
tariff or contract but not contained elsewhere. They shall also include
operating revenue derived from activities performed incident to the
company's tariffed telecommunications operations which, though non-tariffed,
are included in the regulatory process.
(l) Nonregulated revenues. The nonregulated revenue account shall be used
for nonregulated operating revenues when a nonregulated activity involves
the common or joint use of assets or resources in the provision of regulated
and nonregulated products or services as required in §32.23(c) of this
subpart. Revenues from nontariffed activities offered incidental to tariffed
services may be accounted for as regulated revenues, provided the activities
are outgrowths of regulated operations and the revenues do not exceed, in
the aggregate, one percent of total revenues for three consecutive years.
Such activities must be listed in the Commission-approved Cost Allocation
Manual for any company required to file a Cost Allocation Manual.
(m) Uncollectible revenues . Uncollectible revenues shall include amounts
originally credited to the revenue accounts which have proved impracticable
of collection.
(n) Revenue accounts to be maintained.
Account title Class A
account Class B
account
Local network services revenues:
Basic local service revenue 5000
Basic area revenue 5001
Private line revenue 5040
Other basic area revenue 5060
Network access service revenues:
End user revenue 5081 5081
Switched access revenue 5082 5082
Special access revenue 5083 5083
Long distance network services revenues:
Long distance message revenue 5100 5100
Miscellaneous revenues:
Miscellaneous revenue 5200 5200
Directory revenue 5230
Nonregulated revenues:
Nonregulated operating revenue 5280 5280
Uncollectible revenues:
Uncollectible revenue 5300 5300
[ 51 FR 43499 , Dec. 2, 1986, as amended at 53 FR 49322 , Dec. 7, 1988; 59 FR 46930 , Sept. 13, 1994; 64 FR 50008 , Sept. 15, 1999; 67 FR 5690 , Feb. 6,
2002; 69 FR 53649 , Sept. 2, 2004]
§ 32.5000 Basic local service revenue.
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Class B telephone companies shall use this account for revenues of the type
and character required of Class A companies in Accounts 5001 through 5060.
[ 67 FR 5691 , Feb. 6, 2002]
§ 32.5001 Basic area revenue.
top
(a) This account shall include revenue derived from the provision of the
following:
(1) Basic area message services such as flat rate services and measured
services. Included is revenue derived from non-optional extended area
services. Also included is revenue derived from the billed or guaranteed
portion of semi-public services.
(2) Optional extended area service.
(3) Cellular mobile telecommunications systems connected to the public
switched network placed between mobile units and other stations within the
mobile service area.
(4) General radio telecommunications systems connected to the public
switched network placed between mobile units and other stations within the
mobile service area, as well as revenue from mobile radio paging, mobile
dispatching, and signaling services.
(b) Revenue derived from charges for nonpublished number or additional and
boldfaced listings in the alphabetical section of the company's telephone
directories shall be included in account 5230, Directory revenue.
(c) Revenue from private mobile telephone services which do not have access
to the public switched network shall be included in Account 5200,
Miscellaneous revenue.
[ 67 FR 5691 , Feb. 6, 2002, as amended at 69 FR 53650 , Sept. 2, 2004]
§ 32.5002 Optional extended area revenue.
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This account shall include total revenue derived from the provision of
optional extended area service.
§ 32.5003 Cellular mobile revenue.
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This account shall include message revenue derived from cellular mobile
telecommunications systems connected to the public switched network placed
between mobile units and other stations within the mobile service area.
§ 32.5040 Private line revenue.
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This account shall include revenue derived from local services that involve
dedicated circuits, private switching arrangements, and/or predefined
transmission paths, whether virtual or physical, which provide
communications between specific locations (e.g., point-to-point
communications. It includes revenue from subvoice grade, voice grade, audio
and video program grade, digital transmission and local private network
switching as well as the revenue from administrative and operational support
services associated with private network services and facilities, e.g.,
charges for company-directed testing, expedited installation, and service
restoration priority.
§ 32.5060 Other basic area revenue.
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This account shall include:
(a) Revenue from the provision of secondary features which are integrated
with the telecommunications network such as call forwarding, call waiting
and touch-tone line service. Also included is revenue derived from the
provision of public announcement and other record message services,
directory assistance and other call completion services (excluding operator
assisted basic long distance calls), as well as revenue derived from central
office related service connection and termination charges, and other
non-premise customer specific charges associated with public network
services. This account shall also include local revenue not provided for in
other accounts.
(b) Charges and credits resulting from contractual revenue pooling and/or
sharing agreements for tariffed local network services only when they are
not separately identifiable by local network services revenue accounts in
the settlement process. (See also §32.4999(e)). To the extent that the
charges and credits resulting from a settlement process can be identified by
Local Network Services Revenue account they shall be recorded in the
applicable account.
(c) Revenue derived from tariffed information origination/termination plant.
Included is revenue derived from the provision under leasing arrangements of
tariffed customer premises equipment (CPE), terminal equipment, station
apparatus and large private branch exchanges as well as tariffed
nonrecurring charges related solely to station apparatus. Also included are
all tariffed charges for customer premises activities and facilities not
related solely to station apparatus.
[ 67 FR 5691 , Feb. 6, 2002]
§ 32.5081 End user revenue.
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(a) This account shall contain federally and state tariffed monthly flat
rate charge assessed upon end users.
(b) Subsidiary record categories shall be maintained in order that the
company may separately report amounts related to federal and state tariffed
charges.
[ 67 FR 5692 , Feb. 6, 2002]
§ 32.5082 Switched access revenue.
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(a) This account shall consist of federally and state tariffed charges
assessed to interexchange carriers for access to local exchange facilities.
(b) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that relate to
limited pay telephone, carrier common line, line termination, local
switching, intercept, information, common transport and dedicated transport.
The subsidiary records shall also separately show the federal and state
tariffed charges. Such subsidiary record categories shall be reported as
required by part 43 of this chapter.
[ 67 FR 5692 , Feb. 6, 2002]
§ 32.5083 Special access revenue.
top
(a) This account shall include all federally and state tariffed charges
assessed for other than end user or switched access charges referred to in
Account 5081, End user revenue, and Account 5082, Switched access revenue.
(b) Subsidiary record categories shall be maintained in order that the
company may separately report the amounts contained herein that relate to
recurring charges, nonrecurring charges and surcharges. The subsidiary
records shall also separately show the federal and state tariffed charges.
Such subsidiary record categories shall be reported as required by part 43
of this chapter.
[ 67 FR 5692 , Feb. 6, 2002]
§ 32.5100 Long distance message revenue.
top
This account shall include revenue derived from message services that
terminate beyond the basic service area of the originating wire center and
are individually priced. This includes those message services which utilize
the public long distance switching network and the basic subscriber access
line. It also includes those long distance calls placed from mobile and
public telephones, as well as any charges for operator assistance or special
billing directly related to the completion of a specific call. This account
shall also include revenue derived from individually priced message services
offered under calling plans (discounted long distance) which do not utilize
dedicated access lines, as well as those priced at the basic long distance
rates where a discounted toll charge is on a per message basis. Any revenue
derived from monthly or one-time charges for obtaining calling plan services
shall be included in this account. This account includes revenue derived
from the following services:
(a) Long distance services which permit unidirectional calls to a subscriber
from specified services areas (multipoint-to-point service). These calls
require the use of dedicated access lines connecting a subscriber's premises
and a designated central office. These dedicated access lines are generally
separate from those required for the subscriber to place outward calls. The
call is billed to the subscriber even though it is generally initiated by
the subscriber's customer or correspondent.
(b) Long distance services which permit the subscriber to place telephone
calls from one location to other specified service areas
(point-to-multipoint service). These calls are completed without operator
assistance and require the use of a dedicated access line. The dedicated
access line is generally separate from those required for inward message
services and cannot be used to place calls within the basic service area or
calls outside the selected service areas. Outward calls are screened and
blocked to determine whether the calls are within an authorized service
area.
(c) Services extending beyond the basic service area that involve dedicated
circuits, private switching arrangements, and/or predefined transmission
paths, whether virtual or physical, which provide communications between
specific locations (e.g., point-to-point communications). Service connection
charges, termination charges, rearrangements and changes, etc., shall be
included in this account. Revenue derived from associated administrative and
operational support services shall also be included in this account.
(1) Narrow-band analog private network circuits and facilities furnished
exclusively for record forms of communications, such as teletypewriter,
teletypesetter, telewriter, ticker, Morse, signaling, remote metering, and
supervisory services.
(2) Private network circuits and facilities (including multipurpose
wide-band) which provide voice grade services for the transmission of analog
signals. It includes revenue from services such as voice, data and telephoto
communication, as well as remote metering, supervisory control,
miscellaneous signaling and channels furnished for the purpose of extending
customer—provided communications systems. It includes revenue from the
provision of facilities between customer premises and a serving office, a
carrier distribution point, or an extension distribution channel.
(3) Private network circuits and facilities furnished for audio program
transmission purposes, such as radio broadcasting, sound recording (wired
music) and loud speaker services. It includes revenue from the provision of
facilities for the transmission of analog signals between customer premises
and a serving office, a carrier distribution point, or an extension
distribution channel furnished in connection with such services. It also
includes revenue from facilities furnished to carry the audio portion of a
television program if furnished under separate audio rates. If the rate for
television program services includes both the picture and sound portion of
the transmission, the revenue shall also be included in this account.
(4) Private network circuits and facilities furnished for television program
transmission purposes, such as commercial broadcast and educational or
private television services. It includes revenue from the provision of
facilities for the transmission of analog signals between customer premises
and a serving office, a carrier distribution point, or an extension
distribution channel furnished in connection with such services. It also
includes revenue from both the picture and sound portions of transmission
for television program service when provided under a combined rate schedule.
(5) The provision of circuits and facilities for the transmission of digital
signals only.
(6) The provision of common user channels and switching capabilities used
for the transmission of telecommunication signals between three (3) or more
points in the network. Also included is revenue derived from the provision
of basic switching and transfer arrangements used to connect private line
channels.
(7) Charges and credits resulting from contractual revenue pooling and/or
sharing agreements for tariffed long distance public network services and
for tariffed long distance private network services.
[ 67 FR 5692 , Feb. 6, 2002]
§ 32.5200 Miscellaneous revenue.
top
This account shall include revenue derived from the following sources. For
Class B companies, this account shall also include revenue of the type and
character required of Class A companies in Account 5230, Directory revenue.
(a) Rental or subrental to others of telecommunications plant furnished
apart from telecommunications services rendered by the company (this revenue
includes taxes when borne by the lessee). It includes revenue from the rent
of such items as space in conduit, pole line space for attachments, and any
allowance for return on property used in joint operations and shared
facilities agreements. The expense of maintaining and operating the rented
property, including depreciation and insurance, shall be included in the
appropriate operating expense accounts. Taxes applicable to the rented
property shall be included by the owner of the rented property in
appropriate tax accounts. When land or buildings are rented on an incidental
basis for non-telecommunications use, the rental and expenses are included
in Account 7300, Nonoperating income and expense.
(b) Services rendered to other companies under a license agreement, general
services contract, or other arrangement providing for the furnishing of
general accounting, financial, legal, patent, and other general services
associated with the provision of regulated telecommunications services. (See
also Account 5230.)
(c) The provision, either under tariff or through contractual arrangements,
of special billing information to customers in the form of magnetic tapes,
cards or statements. Special billing information provides detail in a format
and/or at a level of detail not normally provided in the standard billing
rendered for the regulated telephone services utilized by the customer.
(d) The performance of customer operations services for others incident to
the company's regulated telecommunications operations which are not provided
for elsewhere. (See also §§32.14(e) and 32.4999(e)).
(e) Contract services (plant maintenance) performed for others incident to
the company's regulated telecommunications operations. This includes revenue
from the incidental performance of nontariffed operating and maintenance
activities for others which are similar in nature to those activities which
are performed by the company in operating and maintaining its own
telecommunications plant facilities. The records supporting the entries in
this account shall be maintained with sufficient particularity to identify
the revenue and associated Plant Specific Operations Expenses related to
each undertaking. This account does not include revenue related to the
performance of operation or maintenance activities under a joint operating
agreement.
(f) The provision of billing and collection services to other
telecommunications companies. This includes amounts charged for services
such as message recording, billing, collection, billing analysis, and
billing information services, whether rendered under tariff or contractual
arrangements.
(g) Charges and credits resulting from contractual revenue pooling and/or
sharing agreements for activities included in the miscellaneous revenue
accounts only when they are not identifiable by miscellaneous revenue
account in the settlement process. (See also §32.4999(e)). The extent that
the charges and credits resulting from a settlement process can be
identified by miscellaneous revenue accounts they shall be recorded in the
applicable account.
(h) The provision of transport and termination of local telecommunications
traffic pursuant to section 251(c) of the Communications Act and part 51 of
this chapter.
(i) The provision of unbundled network elements pursuant to section 251(c)
of the Communications Act and part 51 of this chapter.
(j) This account shall also include other incidental regulated revenue such
as:
(1) Collection overages (collection shortages shall be charged to Account
6623, Customer services);
(2) Unclaimed refunds for telecommunications services when not subject to
escheats;
(3) Charges (penalties) imposed by the company for customer checks returned
for non-payment;
(4) Discounts allowed customers for prompt payment;
(5) Late-payment charges;
(6) Revenue from private mobile telephone services which do not have access
to the public switched network; and
(7) Other incidental revenue not provided for elsewhere in other Revenue
accounts.
(k) Any definitely known amounts of losses of revenue collections due to
fire or theft, at customers' coin-box stations, at public or semipublic
telephone stations, in the possession of collectors en route to collection
offices, on hand at collection offices, and between collection offices and
banks shall be charged to Account 6720, General and Administrative.
[ 69 FR 53650 , Sept. 2, 2004]
§ 32.5230 Directory revenue.
top
This account shall include revenue derived from alphabetical and classified
sections of directories and shall also include fees paid by other entities
for the right to publish the company's directories. Items to be included
are:
(a) All revenue derived from the classified section of the directories;
(b) Revenue from the sale of new telephone directories whether they are the
company's own directories or directories purchased from others. This shall
also include revenue from the sale of specially bound telephone directories
and special telephone directory covers;
(c) Amounts charged for additional and boldface listings, marginal displays,
inserts, and other advertisements in the alphabetical section of the
company's telephone directories; and
(d) Charges for unlisted and non-published telephone numbers.
[ 69 FR 44607 , July 27, 2004]
§ 32.5280 Nonregulated operating revenue.
top
(a) This account shall include revenues derived from a nonregulated activity
involving the common or joint use of assets or resources in the provision of
regulated and nonregulated products or services.
(b) This account shall be debited and regulated revenue accounts shall be
credited at tariffed rates when tariffed services are provided to
nonregulated activities that are accounted for as prescribed in §32.23(c) of
this subpart.
(c) Separate subsidiary record categories shall be maintained for two groups
of nonregulated revenue as follows: one subsidiary record for all revenues
derived from regulated services treated as nonregulated for federal
accounting purposes pursuant to Commission order and the second for all
other revenues derived from a nonregulated activity as set forth in
paragraph (a) of this section.
[ 53 FR 49322 , Dec. 7, 1988, as amended at 64 FR 50008 , Sept. 15, 1999; 67 FR 5694 , Feb. 6, 2002]
§ 32.5300 Uncollectible revenue.
top
This account shall be charged with amounts concurrently credited to Account
1170, Receivables.
[ 67 FR 5694 , Feb. 6, 2002]
Subpart E—Instructions for Expense Accounts
top
§ 32.5999 General.
top
(a) Structure of the expense accounts. (1) The expense section of the system
of accounts shall be organized by expense group summary account, and
subsidiary record category (if required).
(2) The expense section of this system of accounts shall be comprised of
four major expense groups—Plant Specific Operations, Plant Nonspecific
Operations, Customer Operations and Corporate Operations. Expenses to be
recorded in Plant Specific and Plant Nonspecific Operations Expense Groups
generally reflect cost associated with the various kinds of equipment
identified in the plant asset accounts. Expenses to be recorded in the
Customer Operations and Corporate Operations accounts reflect the costs of,
or are associated with, functions performed by people, irrespective of the
organization in which any particular function is performed.
(3) Accounts shall be maintained as prescribed in this section subject to
the conditions described in §32.13 in subpart B. Subsidiary record
categories may be required below the account level by this system of
accounts or by Commission order.
(b) Plant Specific Operations Expense. (1) The Plant Specific Operations
Expense Accounts, 6110 through 6441, are used to record costs related to
specific kinds of telecommunications plant.
(2) The Plant Specific Operations Expense accounts predominantly mirror the
telecommunications plant in service detail accounts and are numbered
consistently with them; the first digit of the expense account being six (6)
and the remaining digits being the same as the last three numbers of the
related plant account. In classifying Plant Specific Operations expenses,
the text of the corresponding plant account should be consulted to ensure
appropriateness.
(3) The Plant Specific Operations Expense accounts shall include the costs
of inspecting, testing (except as specified in Account 6533, Testing
Expense) and reporting on the condition of telecommunications plant to
determine the need for repairs, replacements, rearrangements and changes;
performing routine work to prevent trouble (except as specified in Account
6533), replacing items of plant other than retirement units; rearranging and
changing the location of plant not retired; repairing material for reuse;
restoring the condition of plant damaged by storms, floods, fire or other
casualties (other than the cost of replacing retirement units); inspecting
after repairs have been made; and receiving training to perform these kinds
of work. Also included are the costs of direct supervision (immediate of
first-level) and office support of this work.
(4) In addition to the activities specified in paragraph (b)(3) of this
section, the appropriate Plant Specific Operations Expense accounts shall
include the cost of personnel whose principal job is the operation of plant
equipment, such as general purpose computer operators, aircraft pilots,
chauffeurs and shuttle bus drivers. However, when the operation of equipment
is performed as part of other identifiable functions (such as the use of
office equipment, capital tools or motor vehicles), the operators' cost
shall be charged to accounts appropriate for those functions. (For costs of
operator services personnel, see Accounts 6621, Call completion services,
and 6622, Number services, and for costs of test board personnel see Account
6533.)
(c) Plant nonspecific operations expense. The Plant Nonspecific Operations
Expense accounts shall include expenses related to property held for future
telecommunications use, provisioning expenses, network operations expenses,
and depreciation and amortization expenses. Accounts in this group (except
for Account 6540, Access expense, and Accounts 6560 through 6565) shall
include the costs of performing activities described in narratives for
individual accounts. These costs shall also include the costs of supervision
and office support of these activities.
(d) Customer Operations Expense. The Customer Operations Expense accounts
shall include the cost of performing customer related marketing and services
activities described in narratives for individual accounts. These costs
shall also include the costs of supervision, office support and training for
these activities.
(e) Corporate Operations Expense. The Corporate Operations Expense accounts
shall include the costs of performing executive and planning activities and
general and administrative activities described in narratives for individual
accounts. These costs shall also include the costs of supervision, office
support and training for these activities.
(f) Reimbursements. Reimbursements of actual costs incurred in connection
with joint operations or projects repairing plant due to damages by others,
and obligations to make changes in telecommunications plant (such as highway
relocations), shall be credited to the accounts originally charged.
(g) Expense accounts to be maintained.
Account title Class A
account Class B
account
Income Statement Accounts
Plant specific operations expense:
Network support expense 6110
Motor vehicle expense 6112
Aircraft expense 6113
Tools and other work equipment expense 6114
General support expenses 6120
Land and building expenses 6121
Furniture and artworks expense 6122
Office equipment expense 6123
General purpose computers expense 6124
Central office switching expense 6210
Non-digital switching expense 6211
Digital electronic switching expense 6212
Operators system expense 6220 6220
Central office transmission expenses 6230
Radio systems expense 6231
Circuit equipment expense 6232
Information origination/termination expense 6310
Station apparatus expense 6311
Large private branch exchange expense 6341
Public telephone terminal equipment expense 6351
Other terminal equipment expense 6362
Cable and wire facilities expenses 6410
Poles expense 6411
Aerial cable expense 6421
Underground cable expense 6422
Buried cable expense 6423
Submarine and deep sea cable expense 6424
Intrabuilding network cable expense 6426
Aerial wire expense 6431
Conduit systems expense 6441
Plant nonspecific operations expense:
Other property plant and equipment expenses 6510
Property held for future telecommunications use expense 6511
Provisioning expense 6512
Network operations expenses 6530
Power expense 6531
Network administration expense 6532
Testing expense 6533
Plant operations administration expense 6534
Engineering expense 6535
Access expense 6540 6540
Depreciation and amortization expenses 6560
Depreciation expense—telecommunications plant in service 6561
Depreciation expense—property held for future telecommunications use 6562
Amortization expense—tangible 6563
Amortization expense—intangible 6564
Amortization expense—other 6565
Customer operations expense:
Marketing 6610
Product management and sales 6611
Product advertising 6613
Services 6620
Call completion services 6621
Number services 6622
Customer services 6623
Corporate operations expense:
General and administrative 6720 6720
Provision for uncollectible notes receivable 6790 6790
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 7580 , Mar. 12, 1987; 64 FR 50008 , Sept. 15, 1999; 65 FR 16335 , Mar. 28, 2000; 67 FR 5694 , Feb. 6, 2002;
69 FR 53651 , Sept. 2, 2004]
§ 32.6110 Network support expenses.
top
(a) Class B telephone companies shall use this account for expenses of the
type and character required of Class A companies in Accounts 6112 through
6114.
(b) Credits shall be made to this account by Class B companies for amounts
transferred to Construction and/or other Plant Specific Operations Expense
accounts. These amounts shall be computed on the basis of direct labor
hours.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6112 Motor vehicle expense.
top
(a) This account shall include costs of fuel, lubrications, license and
inspection fees, washing, repainting, and minor accessories. Also included
are the costs of personnel whose principal job is operating motor vehicles,
such as chauffeurs and shuttle bus drivers. The costs of users of motor
vehicles whose principal job is not the operation of motor vehicles shall be
charged to accounts appropriate for the activities performed.
(b) Credits shall be made to this account for amounts transferred to
Construction and/or to other Plant Specific Operations Expense accounts.
These amounts shall be computed on the basis of direct labor hours.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5695 , Feb. 6, 2002]
§ 32.6113 Aircraft expense.
top
(a) This account shall include such costs as aircraft fuel, flight crews,
mechanics and ground crews, licenses and inspection fees, washing,
repainting, and minor accessories.
(b) Credits shall be made to this account for amounts transferred to
Construction and/or to other Plant Specific Operations Expense accounts.
These amounts shall be computed on the basis of direct labor hours.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5695 , Feb. 6, 2002]
§ 32.6114 Tools and other work equipment expense.
top
(a) This account shall include costs incurred in connection with special
purpose vehicles, garage work equipment and other work equipment included in
Account 2114, Tools and other work equipment. This account shall be charged
with costs incurred in connection with the work equipment itself. This
account shall also include such costs as fuel, licenses and inspection fees,
washing, repainting and minor accessories. The costs of using garage work
equipment to maintain motor vehicles shall be charged to Account 6112, Motor
vehicles expense. This account shall not be charged with the costs of
operators of special purpose vehicles and other work equipment. The costs of
operators of this equipment shall be charged to accounts appropriate for the
activities performed.
(b) Credits shall be made to this account for amounts related to special
purpose vehicles and other work equipment transferred to Construction and/or
to other Plant Specific Operations Expense accounts. These amounts shall be
computed on the basis of direct labor hours.
[ 64 FR 50008 , Sept. 15, 1999, as amended at 67 FR 5695 , Feb. 6, 2002]
§ 32.6120 General support expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6121 through 6124.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6121 Land and building expense.
top
(a) This account shall include expenses associated with land and buildings
(excluding amortization of leasehold improvements). This account shall also
include janitorial service, cleaning supplies, water, sewage, fuel and guard
service, and electrical power.
(b) The cost of electrical power used to operate the telecommunications
network shall be charged to Account 6531, Power Expense, and the cost of
separately metered electricity used for operating specific types of
equipment, such as computers, shall be charged to the expense account
appropriate for such use.
§ 32.6122 Furniture and artworks expense.
top
This account shall include expenses associated with furniture and artworks.
§ 32.6123 Office equipment expense.
top
This account shall be charged only with costs incurred in connection with
the office equipment itself. The costs of operators of this equipment shall
be charged to accounts appropriate for the activities performed.
§ 32.6124 General purpose computers expense.
top
This account shall include the costs of personnel whose principal job is the
physical operation of general purpose computers and the maintenance of
operating systems. This excludes the cost of preparation of input data or
the use of outputs which are chargeable to the accounts appropriate for the
activities being performed. Also excluded are costs incurred in planning and
maintaining application systems and databases for general purpose computers.
(See also §32.6720, General and administrative.) Separately metered
electricity for general purpose computers shall also be included in this
account.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6210 Central office switching expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6211 through 6212.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6211 Non-digital switching expense.
top
This account shall include expenses associated with non-digital electronic
switching and electro-mechanical switching.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6212 Digital electronic switching expense.
top
(a) This account shall include expenses associated with digital electronic
switching. Digital electronic switching expenses shall be maintained in the
following subaccounts: 6212.1 Circuit, 6212.2 Packet.
(b) This subaccount 6212.1 Circuit shall include expenses associated with
digital electronic switching equipment used to provide circuit switching.
(c) This subaccount 6212.2 Packet shall include expenses associated with
digital electronic switching equipment used to provide packet switching.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6220 Operator systems expense.
top
This account shall include expenses associated with operator systems
equipment.
§ 32.6230 Central office transmission expense.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6231 and 6232.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6231 Radio systems expense.
top
This account shall include expenses associated with radio systems.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5695 , Feb. 6, 2002]
§ 32.6232 Circuit equipment expense.
top
(a) This account shall include expenses associated with circuit equipment.
Circuit equipment expenses shall be maintained in the following subaccounts:
6232.1 Electronic, 6232.2 Optical.
(b) This subaccount 6232.1 Electronic shall include expenses associated with
electronic circuit equipment.
(c) This subaccount 6232.2 Optical shall include expenses associated with
optical circuit equipment.
[ 67 FR 5695 , Feb. 6, 2002]
§ 32.6310 Information origination/termination expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A telephone companies in Accounts 6311
through 6362.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6311 Station apparatus expense.
top
This account shall include expenses associated with station apparatus.
Expenses associated with company internal use communication equipment shall
be recorded in Account 6123, Office Equipment Expense.
§ 32.6341 Large private branch exchange expense.
top
This account shall include expenses associated with large private branch
exchanges. Expenses associated with company internal use communication
equipment shall be recorded in Account 6123, Office Equipment Expense.
§ 32.6351 Public telephone terminal equipment expense.
top
This account shall include expenses associated with public telephone
terminal equipment.
§ 32.6362 Other terminal equipment expense.
top
This account shall include expenses associated with other terminal
equipment.
§ 32.6410 Cable and wire facilities expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6411 through 6441.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6411 Poles expense.
top
This account shall include expenses associated with poles.
§ 32.6421 Aerial cable expense.
top
(a) This account shall include expenses associated with aerial cable.
(b) Subsidiary record categories shall be maintained as provided in
§32.2421(a) of subpart C.
§ 32.6422 Underground cable expense.
top
(a) This account shall include expenses associated with underground cable.
(b) Subsidiary record categories shall be maintained as provided in
§32.2422(a) of subpart C.
§ 32.6423 Buried cable expense.
top
(a) This account shall include expenses associated with buried cable.
(b) Subsidiary record categories shall be maintained as provided in
§32.2423(a) of subpart C.
§ 32.6424 Submarine and deep sea cable expense.
top
(a) This account shall include expenses associated with submarine and deep
sea cable.
(b) Subsidiary record categories shall be maintained as provided in
§32.2424.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6426 Intrabuilding network cable expense.
top
(a) This account shall include expenses associated with intrabuilding
network cable.
(b) Subsidiary record categories shall be maintained as provided in
§32.2426(a) of subpart C.
§ 32.6431 Aerial wire expense.
top
This account shall include expenses associated with aerial wire.
§ 32.6441 Conduit systems expense.
top
This account shall include expenses associated with conduit systems.
§ 32.6510 Other property, plant and equipment expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6511 and 6512.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6511 Property held for future telecommunications use expense.
top
This account shall include expenses associated with property held for future
telecommunications use.
§ 32.6512 Provisioning expense.
top
(a) This account shall include costs incurred in provisioning material and
supplies, including office supplies. This includes receiving and stocking,
filling requisitions from stock, monitoring and replenishing stock levels,
delivery of material, storage, loading or unloading and administering the
reuse or refurbishment of material. Also included are adjustments resulting
from the periodic inventory of material and supplies.
(b) Credits shall be made to this account for amounts transferred to
construction and/or to Plant Specific Operations Expense. These costs are to
be cleared by adding to the cost of material and supplies a suitable loading
charge.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6530 Network operations expense.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6531 through 6535.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6531 Power expense.
top
This account shall include the cost of electrical power used to operate the
telecommunications network.
§ 32.6532 Network administration expense.
top
This account shall include costs incurred in network administration. This
includes such activities as controlling traffic flow, administering traffic
measuring and monitoring devices, assigning equipment and load balancing,
collecting and summarizing traffic data, administering trunking, and
assigning interoffice facilities and circuit layout work.
§ 32.6533 Testing expense.
top
This account shall include costs incurred in testing telecommunications
facilities from a testing facility (test desk or other testing system) to
determine the condition of plant on either a routine basis or prior to
assignment of the facilities; receiving, recording and analyzing trouble
reports; testing to determine the nature and location of reported trouble
condition; and dispatching repair persons or otherwise initiating corrective
action. (Note also §32.5999(b)(3) of this subpart.)
§ 32.6534 Plant operations administration expense.
top
(a) This account shall include costs incurred in the general administration
of plant operations. This includes supervising plant operations (except as
specified in §32.5999(a)(3) of this subpart; planning, coordinating and
monitoring plant operations; and performing staff work such as developing
methods and procedures, preparing and conducting training (except on-the-job
training) and coordinating safety programs.
(b) Credits shall be made to this account for amounts transferred to
construction accounts. These amounts shall be computed on the basis of
direct labor hours. (See §32.2000(c)(2)(ii) of subpart C.)
§ 32.6535 Engineering expense.
top
(a) This account shall include costs incurred in the general engineering of
the telecommunications plant which are not directly chargeable to an
undertaking or project. This includes developing input to the fundamental
planning process, performing preliminary work or advance planning in
connection with potential undertakings, and performing special studies of an
engineering nature.
(b) Credits shall be made to this account for amounts transferred to
construction accounts. These amounts shall be computed on the basis of
direct labor hours. (See §32.2000(c)(2)(ii) of subpart C.)
§ 32.6540 Access expense.
top
(a) This account shall include amounts paid by interexchange carriers or
other exchange carriers to another exchange carrier for the provision of
carrier's carrier access.
(b) Subsidiary record categories shall be maintained in order that the
entity may separately report interstate and intrastate carrier's carrier
expense. Such subsidiary record categories shall be reported as required by
Part 43 of this Commission's Rules and Regulations.
[ 52 FR 43917 , Nov. 17, 1987]
§ 32.6560 Depreciation and amortization expenses.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6561 through 6565.
[ 69 FR 53652 , Sept. 2, 2004]
§ 32.6561 Depreciation expense—telecommunications plant in service.
top
This account shall include the depreciation expense of capitalized costs in
Accounts 2112 through 2441, inclusive.
[ 69 FR 44607 , July 27, 2004]
§ 32.6562 Depreciation expense—property held for future telecommunications
use.
top
This account shall include the depreciation expense of capitalized costs
included in Account 2002, Property held for future telecommunications use.
[ 69 FR 53652 , Sept. 2, 2004]
§ 32.6563 Amortization expense—tangible.
top
This account shall include only the amortization of costs included in
Accounts 2681, Capital leases, and 2682, Leasehold improvements.
[ 69 FR 44607 , July 27, 2004]
§ 32.6564 Amortization expense—intangible.
top
This account shall include the amortization of costs included in Account
2690, Intangibles.
[ 69 FR 44607 , July 27, 2004]
§ 32.6565 Amortization expense—other.
top
(a) This account shall include only the amortization of costs included in
Account 2005, Telecommunications plant adjustment.
(b) This account shall also include lump-sum write offs of amounts of plant
acquisition adjustment as provided for in §32.2005(b)(3) of subpart C.
(c) Subsidiary records shall be maintained so as to show the character of
the amounts contained in this account.
[ 69 FR 44607 , July 27, 2004]
§ 32.6610 Marketing.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6611 through 6613.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6611 Product management and sales.
top
This account shall include:
(a) Costs incurred in performing administrative activities related to
marketing products and services. This includes competitive analysis, product
and service identification and specification, test market planning, demand
forecasting, product life cycle analysis, pricing analysis, and
identification and establishment of distribution channels.
(b) Costs incurred in selling products and services. This includes
determination of individual customer needs, development and presentation of
customer proposals, sales order preparation and handling, and preparation of
sales records.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6613 Product advertising.
top
This account shall include costs incurred in developing and implementing
promotional strategies to stimulate the purchase of products and services.
This excludes nonproduct-related advertising, such as corporate image, stock
and bond issue and employment advertisements, which shall be included in the
appropriate functional accounts.
§ 32.6620 Services.
top
Class B telephone companies shall use this account for expenses of the type
and character required of Class A companies in Accounts 6621 through 6623.
[ 69 FR 53652 , Sept. 2, 2004]
§ 32.6621 Call completion services.
top
This account shall include costs incurred in helping customers place and
complete calls, except directory assistance. This includes handling and
recording; intercept; quoting rates, time and charges; and all other
activities involved in the manual handling of calls.
[ 69 FR 44607 , July 27, 2004]
§ 32.6622 Number services.
top
This account shall include costs incurred in providing customer number and
classified listings. This includes preparing or purchasing, compiling, and
disseminating those listings through directory assistance or other means.
§ 32.6623 Customer services.
top
(a) This account shall include costs incurred in establishing and servicing
customer accounts. This includes:
(1) Initiating customer service orders and records;
(2) Maintaining and billing customer accounts;
(3) Collecting and investigating customer accounts, including collecting
revenues, reporting receipts, administering collection treatment, and
handling contacts with customers regarding adjustments of bills;
(4) Collecting and reporting pay station receipts; and
(5) Instructing customers in the use of products and services.
(b) This account shall also include amounts paid by interexchange carriers
or other exchange carriers to another exchange carrier for billing and
collection services. Subsidiary record categories shall be maintained in
order that the entity may separately report interstate and intrastate
amounts. Such subsidiary record categories shall be reported as required by
part 43 of this Commission's rules and regulations.
[ 69 FR 44608 , July 27, 2004]
§ 32.6720 General and administrative.
top
This account shall include costs incurred in the provision of general and
administrative services as follows:
(a) Formulating corporate policy and in providing overall administration and
management. Included are the pay, fees and expenses of boards of directors
or similar policy boards and all board-designated officers of the company
and their office staffs, e.g., secretaries and staff assistants.
(b) Developing and evaluating long-term courses of action for the future
operations of the company. This includes performing corporate organization
and integrated long-range planning, including management studies, options
and contingency plans, and economic strategic analysis.
(c) Providing accounting and financial services. Accounting services include
payroll and disbursements, property accounting, capital recovery, regulatory
accounting (revenue requirements, separations, settlements and corollary
cost accounting), non-customer billing, tax accounting, internal and
external auditing, capital and operating budget analysis and control, and
general accounting (accounting principles and procedures and journals,
ledgers, and financial reports). Financial services include banking
operations, cash management, benefit investment fund management (including
actuarial services), securities management, debt trust administration,
corporate financial planning and analysis, and internal cashier services.
(d) Maintaining relations with government, regulators, other companies and
the general public. This includes:
(1) Reviewing existing or pending legislation (see also Account 7300,
Nonoperating income and expense, for lobbying expenses);
(2) Preparing and presenting information for regulatory purposes, including
tariff and service cost filings, and obtaining radio licenses and
construction permits;
(3) Performing public relations and non-product-related corporate image
advertising activities;
(4) Administering relations, including negotiating contracts, with
telecommunications companies and other utilities, businesses, and
industries. This excludes sales contracts (see also Account 6611, Product
management and sales); and
(5) Administering investor relations.
(e) Performing personnel administration activities. This includes:
(1) Equal Employment Opportunity and Affirmative Action Programs;
(2) Employee data for forecasting, planning and reporting;
(3) General employment services;
(4) Occupational medical services;
(5) Job analysis and salary programs;
(6) Labor relations activities;
(7) Personnel development and staffing services, including counseling,
career planning, promotion and transfer programs;
(8) Personnel policy development;
(9) Employee communications;
(10) Benefit administration;
(11) Employee activity programs;
(12) Employee safety programs; and
(13) Nontechnical training course development and presentation.
(f) Planning and maintaining application systems and databases for general
purpose computers.
(g) Providing legal services: This includes conducting and coordinating
litigation, providing guidance on regulatory and labor matters, preparing,
reviewing and filing patents and contracts and interpreting legislation.
Also included are court costs, filing fees, and the costs of outside
counsel, depositions, transcripts and witnesses.
(h) Procuring material and supplies, including office supplies. This
includes analyzing and evaluating suppliers' products, selecting appropriate
suppliers, negotiating supply contracts, placing purchase orders, expediting
and controlling orders placed for material, developing standards for
material purchased and administering vendor or user claims.
(i) Making planned search or critical investigation aimed at discovery of
new knowledge. It also includes translating research findings into a plan or
design for a new product or process or for a significant improvement to an
existing product or process, whether intended for sale or use. This excludes
making routine alterations to existing products, processes, and other
ongoing operations even though those alterations may represent improvements.
(j) Performing general administrative activities not directly charged to the
user, and not provided in paragraphs (a) through (i) of this section. This
includes providing general reference libraries, food services (e.g.,
cafeterias, lunch rooms and vending facilities), archives, general security
investigation services, operating official private branch exchanges in the
conduct of the business, and telecommunications and mail services. Also
included are payments in settlement of accident and damage claims, insurance
premiums for protection against losses and damages, direct benefit payments
to or on behalf of retired and separated employees, accident and sickness
disability payments, supplemental payments to employees while in
governmental service, death payments, and other miscellaneous costs of a
corporate nature. This account excludes the cost of office services, which
are to be included in the accounts appropriate for the activities supported.
[ 67 FR 5696 , Feb. 6, 2002]
§ 32.6790 Provision for uncollectible notes receivable.
top
This account shall be charged with amounts concurrently credited to Account
1170, Receivables.
[ 67 FR 5697 , Feb. 6, 2002]
Subpart F—Instructions For Other Income Accounts
top
§ 32.6999 General.
top
(a) Structure of the other income accounts. The Other Income Accounts are
designed to reflect both operating and nonoperating income items including
taxes, extraordinary items and other income and expense items not properly
included elsewhere.
(b) Other income accounts listing.
Account title Class A
account Class B
account
Other operating income and expense:
Other operating income and expense 7100 7100
Operating taxes:
Operating taxes 7200
Operating investment tax credits-net 7210
Operating Federal income taxes 7220
Operating state and local income taxes 7230
Operating other taxes 7240
Provision for deferred operating income taxes—net 7250
Nonoperating income and expense:
Nonoperating income and expense 7300 7300
Nonoperating taxes:
Nonoperating taxes 7400 7400
Interest and related items:
Interest and related items 7500 7500
Extraordinary items 7600 7600
Jurisdictional differences and non-regulated income items:
Income effect of jurisdictional ratemaking difference—net 7910 7910
Nonregulated net income 7990 7990
[ 67 FR 5697 , Feb. 6, 2002]
§ 32.7100 Other operating income and expenses.
top
This account shall be used to record the results of transactions, events or
circumstances during the periods which are incidental or peripheral to the
major or central operations of the company. It shall be used to record all
items of an operating nature such as incidental work performed for others
not provided for elsewhere. Whenever practicable the inflows and outflows
associated with a transaction, event or circumstances shall be matched and
the result shown as a net gain or loss. This account shall include the
following:
(a) Profits realized from custom work (plant construction) performed for
others incident to the company's regulated telecommunications operations.
This includes profits from the incidental performance of nontariffed
construction activities (including associated engineering and design) for
others which are similar in nature to those activities which are performed
by the company in constructing its own telecommunications plant facilities.
The records supporting the entries in this account for income and custom
work shall be maintained with sufficient particularity to identify
separately the revenue and costs associated with each undertaking.
(b) Return on investment for the use of regulated property plant and
equipment to provide nonregulated products and services.
(c) All gains and losses resulting from the exchange of foreign currency.
Transaction (realized) gains or losses shall be measured based on the
exchange rate in effect on the transaction date. Unrealized gains or losses
shall be measured based on the exchange rate in effect at the balance sheet
date.
(d) Gains or losses resulting from the disposition of land or artworks.
(e) Charges or credits, as appropriate, to record the results of
transactions, events or circumstances which are of an operational nature,
but occur irregularly or are peripheral to the major or central operations
of the company and not provided for elsewhere.
[ 67 FR 5698 , Feb. 6, 2002]
§ 32.7199 Content of accounts.
top
The Operating Tax accounts shall include the taxes arising from the central
operations of the company.
§ 32.7200 Operating taxes.
top
Class B telephone companies shall use this account for operating taxes of
the type and character required of Class A companies in Accounts 7210
through 7250.
[ 67 FR 5698 , Feb. 6, 2002]
§ 32.7210 Operating investment tax credits—net.
top
(a) This account shall be charged and Account 4320, Unamortized Operating
Investment Tax Credits—Net, shall be credited with investment tax credits
generated from qualified expenditures related to regulated operations which
the company defers rather than recognizes currently in income.
(b) This account shall be credited and Account 4320 shall be charged ratably
with the amortization of each year's investment tax credits included in
Account 4320 for investment services for ratemaking purposes. Such
amortization shall be determined in relation to the period of time used for
computing book depreciation on the property with respect to which the tax
credits relate.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5698 , Feb. 6, 2002]
§ 32.7220 Operating Federal income taxes.
top
(a) This account shall be charged and Account 4070, Income Taxes-Accrued,
shall be credited for the amount of Federal Income Taxes for the current
period. This account shall also reflect subsequent adjustments to amounts
previously charged.
(b) Taxes should be accrued each month on an estimated basis and adjustments
made as later data becomes available.
(c) Tax credits, other than investment tax credits, if normalized, shall be
recorded consistent with the accounting for investment tax credits and shall
be amortized to income as directed by this Commission.
(d) No entries shall be made to this account to reflect interperiod tax
allocations.
§ 32.7230 Operating state and local income taxes.
top
(a) This account shall be charged and Account 4070, Income Taxes—Accrued,
shall be credited for the amount of state and local income taxes for the
current period. This account shall also reflect subsequent adjustments to
amounts previously charged.
(b) Taxes should be accrued each month on an estimated basis and adjustments
made as later data becomes available.
(c) No entries shall be made to this account to reflect interperiod tax
allocations.
§ 32.7240 Operating other taxes.
top
(a) This account shall be charged and Account 4080, Other Taxes—Accrued,
shall be credited for all taxes, other than Federal, state and local income
taxes and payroll related taxes, related to regulated operations applicable
to current periods. Among the items includable in this account are property,
gross receipts, franchise and capital stock taxes; this account shall also
reflect subsequent adjustments to amounts previously charged.
(b) Special assessments for street and other improvements and special
benefit taxes, such as water taxes and the like, shall be included in the
operating expense accounts or investment accounts, as may be appropriate.
(c) Discounts allowed for prompt payment of taxes shall be credited to the
account to which the taxes are chargeable.
(d) Interest on tax assessments which are not paid when due shall be
included in Account 7500, Interest and related items.
(e) Taxes paid by the company under tax-free covenants on indebtedness shall
be charged to Account 7300, Nonoperating income and expense.
(f) Sales and use taxes shall be accounted for, so far as practicable, as
part of the cost of the items to which the taxes relate.
(g) Taxes on rented telecommunications plant which are borne by the lessee
shall be credited by the owner to Account 5200, Miscellaneous revenue, and
shall be charged by the lessee to the appropriate Plant Specific Operations
Expense account.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 67 FR 5698 , Feb. 6, 2002]
§ 32.7250 Provision for deferred operating income taxes—net.
top
(a) This account shall be charged or credited, as appropriate, with contra
entries recorded to the following accounts for income tax expense that has
been deferred in accordance with §32.22 of Subpart B.
4100 Net Current Deferred Operating Income Taxes
4340 Net Noncurrent Deferred Operating Income Taxes
(b) Subsidiary record categories shall be maintained to distinguish between
property and nonproperty related deferrals and so that the company may
separately report that amounts contained herein that relate to Federal,
state and local income taxes. Such subsidiary record categories shall be
reported as required by part 43 of this Commission's Rules and Regulations.
§ 32.7300 Nonoperating income and expense.
top
This account shall be used to record the results of transactions, events and
circumstances affecting the company during a period and which are not
operational in nature. This account shall include such items as nonoperating
taxes, dividend income and interest income. Whenever practicable, the
inflows and outflows associated with a transaction or event shall be matched
and the result shown as a net gain or loss. This account shall include the
following:
(a) Dividends on investments in common and preferred stock, which is the
property of the company, whether such stock is owned by the company and held
in its treasury, or deposited in trust including sinking or other funds, or
otherwise controlled.
(b) Dividends received and receivable from affiliated companies accounted
for on the equity method shall be included in Account 1410, Other noncurrent
assets, as a reduction of the carrying value of the investments.
(c) Interest on securities, including notes and other evidences of
indebtedness, which are the property of the company, whether such securities
are owned by the company and held in its treasury, or deposited in trust
including sinking or other funds, or otherwise controlled. It shall also
include interest on cash bank balances, certificates of deposits, open
accounts, and other analogous items.
(d) For each month the applicable amount requisite to extinguish, during the
interval between the date of acquisition and date of maturity, the
difference between the purchase price and the par value of securities owned
or held in sinking or other funds, the income from which is includable in
this account. Amounts thus credited or charged shall be concurrently
included in the accounts in which the securities are carried.
(e) Amounts charged to the telecommunications plant under construction
account related to allowance for funds used during construction. (See
§32.2000(c)(2)(x).)
(f) Gains or losses resulting from:
(1) The disposition of land or artworks;
(2) The disposition of plant with traffic;
(3) The disposition of nonoperating telecommunications plant not previously
used in the provision of telecommunications services.
(g) All other items of income and gains or losses from activities not
specifically provided for elsewhere, including representative items such as:
(1) Fees collected in connection with the exchange of coupon bonds for
registered bonds;
(2) Gains or losses realized on the sale of temporary cash investments or
marketable equity securities;
(3) Net unrealized losses on investments in current marketable equity
securities;
(4) Write-downs or write-offs of the book costs of investment in equity
securities due to permanent impairment;
(5) Gains or losses of nonoperating nature arising from foreign currency
exchange or translation;
(6) Gains or losses from the extinguishment of debt made to satisfy sinking
fund requirements;
(7) Amortization of goodwill;
(8) Company's share of the earnings or losses of affiliated companies
accounted for on the equity method; and
(9) The net balance of the revenue from and the expenses (including
depreciation, amortization and insurance) of property, plant, and equipment,
the cost of which is includable in Account 2006, Nonoperating plant.
(h) Costs that are typically given special regulatory scrutiny for
ratemaking purposes. Unless specific justification to the contrary is given,
such costs are presumed to be excluded from the costs of service in setting
rates.
(1) Lobbying includes expenditures for the purpose of influencing public
opinion with respect to the election or appointment of public officials,
referenda, legislation, or ordinances (either with respect to the possible
adoption of new referenda, legislation or ordinances, or repeal or
modification of existing referenda, legislation or ordinances) or approval,
modification, or revocation of franchises, or for the purpose of influencing
the decisions of public officials. This also includes advertising, gifts,
honoraria, and political contributions. This does not include such
expenditures which are directly related to communications with and
appearances before regulatory or other governmental bodies in connection
with the reporting utility's existing or proposed operations;
(2) Contributions for charitable, social or community welfare purposes;
(3) Membership fees and dues in social, service and recreational or athletic
clubs and organizations;
(4) Penalties and fines paid on account of violations of statutes. This
account shall also include penalties and fines paid on account of violations
of U.S. antitrust statutes, including judgements and payments in settlement
of civil and criminal suits alleging such violations; and
(5) Abandoned construction projects.
(i) Cash discounts on bills for material purchased shall not be included in
this account.
[ 67 FR 5698 , Feb. 6, 2002]
§ 32.7400 Nonoperating taxes.
top
This account shall include taxes arising from activities which are not a
part of the central operations of the entity.
(a) This account shall be charged and Account 4330, Unamortized nonoperating
investment tax credits—net, shall be credited with investment tax credits
generated from qualified expenditures related to other operations which the
company has elected to defer rather than recognize currently in income.
(b) This account shall be credited and Account 4330 shall be charged with
the amortization of each year's investment tax credits included in such
accounts relating to amortization of previously deferred investment tax
credits of other property or regulated property, the amortization of which
does not serve to reduce costs of service (but the unamortized balance does
reduce rate base) for ratemaking purposes. Such amortization shall be
determined with reference to the period of time used for computing book
depreciation on the property with respect to which the tax credits relate.
(c) This account shall be charged and Account 4070, Income taxes—accrued,
shall be credited for the amount of nonoperating Federal income taxes and
state and local income taxes for the current period. This account shall also
reflect subsequent adjustments to amounts previously charged.
(d) Taxes shall be accrued each month on an estimated basis and adjustments
made as more current data becomes available.
(e) Companies that adopt the flow-through method of accounting for
investment tax credits shall reduce the calculated provision in this account
by the entire amount of the credit realized during the year. Tax credits,
other than investment tax credits, if normalized, shall be recorded
consistent with the accounting for investment tax credits.
(f) No entries shall be made to this account to reflect interperiod tax
allocation.
(g) Taxes (both Federal and state) shall be accrued each month on an
estimated basis and adjustments made as later data becomes available.
(h) This account shall be charged and Account 4080, Other taxes—accrued,
shall be credited for all nonoperating taxes, other than Federal, state and
local income taxes, and payroll related taxes for the current period. Among
the items includable in this account are property, gross receipts, franchise
and capital stock taxes. This account shall also reflect subsequent
adjustments to amounts previously charged.
(i) This account shall be charged or credited, as appropriate, with contra
entries recorded to the following accounts for nonoperating tax expenses
that has been deferred in accordance with §32.22: 4110 Net Current Deferred
Nonoperating Income Taxes, 4350 Net Noncurrent Deferred Nonoperating Income
Taxes.
(j) Subsidiary record categories shall be maintained to distinguish between
property and nonproperty related deferrals and so that the company may
separately report the amounts contained herein that relate to Federal, state
and local income taxes. Such subsidiary record categories shall be reported
as required by part 43 of this chapter.
[ 67 FR 5699 , Feb. 6, 2002]
§ 32.7500 Interest and related items.
top
(a) This account shall include the current accruals of interest on all
classes of funded debt the principal of which is includable in Account 4200,
Long term debt and funded debt. It shall also include the interest on funded
debt the maturity of which has been extended by specific agreement. This
account shall be kept so that the interest on each class of funded debt may
be shown separately in the annual reports to this Commission.
(b) These accounts shall not include charges for interest on funded debt
issued or assumed by the company and held by or for it, whether pledged as
collateral or held in its treasury, in special deposits or in sinking or
other funds.
(c) Interest expressly provided for and included in the face amount of
securities issued shall be charged at the time of issuance to Account 1280,
Prepayments, and cleared to this account as the term expires to which the
interest applies.
(d) This account shall also include monthly amortization of balances in
Account 4200, Long-term debt and funded debt.
(e) This account shall include the interest portion of each capital lease
payment.
(f) This account shall include the monthly amortization of the balances in
Account 1410, Other noncurrent assets.
(g) This account shall include all interest deductions not provided for
elsewhere, e.g., discount, premium, and expense on notes maturing one year
or less from date of issue.
(h) A list of representative items of indebtedness, the interest on which is
chargeable to this account, follows:
(1) Advances from affiliated companies;
(2) Advances from nonaffiliated companies and other liabilities;
(3) Assessments for public improvements past due;
(4) Bond coupons, matured and unpaid;
(5) Claims and judgments;
(6) Customers' deposits;
(7) Funded debt mature, with respect to which a definite agreement as to
extension has not been made;
(8) Notes payable on demand or maturing one year or less from date of issue;
(9) Open accounts;
(10) Tax assessments, past due; and
(11) Discount, premium, and issuance expense of notes maturing one year or
less from date of issue.
[ 67 FR 5699 , Feb. 6, 2002]
§ 32.7600 Extraordinary items.
top
(a) This account is intended to segregate the effects of events or
transactions that are extraordinary. Extraordinary events and transactions
are distinguished by both their unusual nature and by the infrequency of
their occurrence, taking into account the environment in which the company
operates. This account shall also include the related income tax effect of
the extraordinary items.
(b) This account shall be credited and/or charged with nontypical,
noncustomary and infrequently recurring gains and/or losses which would
significantly distort the current year's income computed before such
extraordinary items, if reported other than as extraordinary items.
(c) This account shall be charged or credited and Account 4070, Income
taxes—accrued, shall be credited or charged for all current income tax
effects (Federal, state and local) of extraordinary items.
(d) This account shall also be charged or credited, as appropriate, with a
contra amount recorded to Account 4350, Net noncurrent deferred nonoperating
income taxes or Account 4110, Net current deferred nonoperating income taxes
for the income tax effects (Federal, state and local) of extraordinary items
that have been deferred in accordance with §32.22.
[ 67 FR 5700 , Feb. 6, 2002]
§ 32.7899 Content of accounts.
top
Jurisdictional differences and nonregulated income amounts shall be included
in Accounts 7910 and 7990.
§ 32.7910 Income effect of jurisdictional ratemaking differences—net.
top
This account shall include the impact on revenues and expenses of the
jurisdictional ratemaking practices which vary from those of this
Commission. All entries recorded in this account shall be recorded net of
the applicable income tax effects and shall be supported by appropriate
subsidiary records, where necessary, as provided for in §32.13(e) of subpart
B.
§ 32.7990 Nonregulated net income.
top
(a) This account shall be used by those companies who offer nonregulated
activities that do not involve the joint or common use of assets or
resources used in the provision of both regulated and nonregulated products
and services, and which have not established a separate subsidiary for that
purpose.
(b) All revenue and expenses (including taxes) incurred in these
nonregulated activities shall be recorded on separate books of account for
such operations. Only the net of the total revenues and total expenses shall
be recorded in this account, with a contra debit or credit to account
1406.3.
[ 52 FR 6562 , Mar. 4, 1987]
Subpart G—Glossary
top
§ 32.9000 Glossary of terms.
top
When used in this system of accounts:
Accelerated depreciation means a depreciation method or period of time,
including the treatment given cost of removal and gross salvage, used in
calculating depreciation deductions on income tax returns which is different
from the depreciation method or period of time prescribed by this Commission
for use in calculating depreciation expense recorded in a company's books of
account.
Account means a specific element of a chart of accounts used to record,
classify and accumulate similar financial transactions resulting from the
operations of the entity. “Accounts” or “these accounts” refer to the
accounts of this system of accounts.
Accounting system means the total set of interrelated principles, rules,
requirements, definitions, accounts, records, procedures and mechanisms
necessary to operate and evaluate the entity from a financial perspective.
An accounting system generally consists of a chart of accounts, various
parallel subsystems and subsidiary records. An accounting system is utilized
to provide the necessary financial information to users to meet judiciary
and other responsibilities.
Affiliated companies means companies that directly or indirectly through one
or more intermediaries, control or are controlled by, or are under common
control with, the accounting company. See also Control.
Amortization means the systematic recoveries, through ratable charges to
expense, of the cost of assets.
Associated equipment means that equipment which functions with a specific
type of plant or with two (2) or more types of plant, e.g., switching
equipment, network power equipment, circuit equipment, common channel
network signaling equipment or network operations equipment. Associated
equipment shall be classified to the account appropriate for the type of
equipment with which it is predominately used rather than on its own
characteristics.
Illustrative examples of associated equipment are:
Alarm and signal apparatus
Auxiliary framing
Cable and cable racks
Distributing frames and equipment thereon
Frame and aisle lighting equipment (not permanently attached to the
building)
Relay racks and panels
Basic service area means the minimum specified calling area for which a
tariff is prescribed.
Book cost means the amount at which property is recorded in these accounts,
without deduction of related allowances.
Common carrier or carrier means any person engaged as a common carrier for
hire, in interstate or foreign communication by wire or radio or in
interstate or foreign radio transmission of energy, except where reference
is made to common carriers not subject to this Act; but a person engaged in
radio broadcasting shall not, insofar as such person is so engaged, be
deemed a common carrier.
Company or the company, when not otherwise indicated in the context, means
the accounting entity. It includes such unincorporated entities which may be
subject to the Communications Act of 1934, as amended.
Control (including the terms “controlling,” “controlled by,” and “under
common control with”) means the possession directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
company, whether such power is exercised through one or more intermediary
companies, or alone, or in conjunction with, or pursuant to an agreement
with, one or more other companies, and whether such power is established
through a majority or minority ownership or voting of securities, common
directors, officers, or stockholders, voting trusts, holding trusts,
affiliated companies, contract, or any other direct or indirect means.
Cost , except as applied to telecommunications plants, franchises, and
patent rights, means the amount of money actually paid (or the current money
value of any consideration other than money exchanged) for property or
services. See also Original Cost.
Cost of removal means the cost of demolishing, dismantling, removing,
tearing down, or otherwise disposing of telecommunications plant and
recovering the salvage, including the cost of transportation and handling
incident thereto.
Depreciation means the loss not restored by current maintenance, incurred in
connection with the consumption or prospective retirement of
telecommunications plant in the course of service from causes which are
known to be in current operation, against which the company is not protected
by insurance, and the effect of which can be forecast with a reasonable
approach to accuracy. Among the causes to be given consideration are wear
and tear, decay, action of the elements, inadequacy, obsolescence, changes
in technology, changes in demand and requirements of public authorities.
Entity means a legal enterprise (common carrier) engaged in interstate
communications within the meaning of the Communications Act of 1934, as
amended.
Group plan, as applied to depreciation accounting, means the plan under
which depreciation charges are accrued upon the basis of the original cost
of all property included in each depreciable plant account, using the
average service life thereof properly weighted, and upon the retirement of
any depreciable property its cost is charged to the depreciation reserve
whether or not the particular item has attained the average service life.
Indexed revenue threshold for a given year means $100 million, adjusted for
inflation, as measured by the Department of Commerce Gross Domestic Product
Chain-type Price Index (GDP-CPI), for the period from October 19, 1992 to
the given year. The indexed revenue threshold for a given year shall be
determined by multiplying $100 million by the ratio of the annual value of
the GDP-CPI for the given year to the estimated seasonally adjusted GDP-CPI
on October 19, 1992. The indexed revenue threshold shall be rounded to the
nearest $1 million. The seasonally adjusted GDP-CPI on October 19, 1992 is
determined to be 100.69.
Intangible property means assets that have no physical existence but instead
have value because of the rights which ownership confers.
Intrasystems means assets consisting of:
(1) PBX and Key System Common Equipment (a switchboard or switching
equipment shared by all stations);
(2) Associated CPE station equipment (usually telephone or Key Telephone
Systems); and
(3) Intrasystem wiring (all cable or wiring and associated components which
connect the common equipment and the station equipment, located on the
customer's side of the demarcation point).
An intrasystem does not include property, plant or equipment which are not
solely dedicated to its operation.
Mid-sized incumbent local exchange carrier is a carrier whose annual revenue
from regulated telecommunications operations equals or exceeds the indexed
revenue threshold and whose revenue when aggregated with the revenues of any
local exchange carrier that it controls, is controlled by, or with which it
is under common control is less than $7 billion (indexed for inflation as
measured by the Department of Commerce Gross Domestic Product Chain-type
Price Index (GDP-CPI)).
Minor items, as applied to depreciable telecommunications plant, means any
part or element of such plant, which when removed, (with or without
replacement) does not initiate retirement accounting.
Original cost or cost , as applied to telecommunications plant, rights of
way and other intangible property, means the actual money cost of (or the
current money value of any consideration other than money exchanged for)
property at the time when it was first dedicated to use by a regulated
telecommunications entity, whether the accounting company or by
predecessors.
For the application of this definition to property acquired from
predecessors see §32.2000(b)(1) of subpart C. Note also the definition of
Cost in this section.
Plant retired means plant which has been removed, sold, abandoned,
destroyed, or otherwise withdrawn from service.
Retirement units , as applied to depreciable telecommunications plant, means
those items of plant which when removed (with or without replacement) cause
the initiation of retirement accounting entries.
Salvage value means the amount received for property retired, if sold, or if
retained for reuse, the amount at which the material recovered is chargeable
to Account 1220, Material and Supplies, or other appropriate account.
Straight-line method , as applied to depreciation accounting, means the plan
under which the cost of property is charged to operating expenses and
credited to accumulated depreciation through equal annual charges as nearly
as may be during its service life.
Subsidiary record means accumulation of detailed information which is
required by this Commission to be maintained in support of entries to the
accounts.
Subsidiary record categories means those segregations of certain regulated
costs, expenses and revenues which must be maintained and are subject to
specific reporting requirements of this Commission.
Subsystems, parallel mechanisms means processes or procedures which augment
the use of a chart of accounts in the financial operation of the entity.
These subsystems operate on and/or process account and subsidiary record
information for specific purposes.
Telecommunications means any transmission, emission, or reception of signs,
signals, writing, images or sounds or intelligence of any nature by wire,
radio, visual or other electromagnetic systems. This encompasses the
aggregate of several modes of conveying information, signals or messages
over a distance. Included in the telecommunications industry is the
transmitting, receiving, or exchanging of information among multiple
locations. The minimum elements required for the telecommunications process
to occur are a message source, a transmission medium and a receiver.
Time of installation means the date at which telecommunications plant is
placed in service.
Time of retirement means the date at which telecommunications plant is
retired from service.
Tangible property means assets characterized by physical existence, such as
land, buildings, equipment, furniture, fixtures and tools.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 61 FR 50245 , Sept. 25, 1996; 62 FR 39778 , July 24, 1997; 62 FR 51064 , Sept. 30, 1997; 64 FR 50008 , Sept. 15,
1999; 67 FR 5700 , Feb. 6, 2002]
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